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Intel Corp. (NASDAQ: INTC) is facing growing competition on all sides, especially as the tech sector continues to drive forward. While Advanced Micro Devices, Inc. (NASDAQ: AMD) and NVIDIA Corp. (NASDAQ: NVDA) aren’t new to the game, their growth in the past year alone has given pause to Intel, or at least Merrill Lynch thinks so.

Its early days and AMD’s historical execution has been weak, but now Merrill Lynch believes increased AMD competition in servers, and share gains by NVIDIA in artificial intelligence/accelerators, could limit Intel’s expansion of its average selling prices (ASPs) that have been a key source of its growth in data center (and PCs).

The brokerage firm also pointed to Intel’s lower free cash flow due to opex pressure from larger cloud customers and capex pressure from increased investments in memory products.

Overall, Merrill Lynch kept 2017 steady, but for 2018 the firm lowered data center sales growth to 8% from 11% year over year and lowered EPS by $0.06 to $3.01. The firm has a Neutral rating and reduced its price objective to $38 from $42.

According to Merrill Lynch:

Intel’s data center platform sales have grown at an 11% CAGR the last five years, with 7pts from unit growth and 3-4pts from rising ASP. Intel was able to expand ASP both via providing higher performance, and by taking advantage of limited competition. Meanwhile in PCs, Intel’s sales growth has been flattish the last five years as expanding ASP offset the secular unit declines. Both these trends are at risk if large PC, cloud and enterprise customers now have AMD as an option. Meanwhile NCDA continues to put pressure by shifting more workloads on to its graphics accelerators, and away from Intel’s processors. Third, we note the price/opex pressure exerted by large cloud customers has reduced Intel’s data center EBIT margins by 20pp to 35% in last two years. Intel’s July-11 launch of Skylake servers is next newsflow catalyst.

As a counterpoint, it could be somewhat premature to dismiss Intel’s dominance/incumbency against AMD, which has had a weak record of execution. Also, it’s possible that Intel could take share in iPhone modems near term and become a foundry partner longer-term at Apple who is currently in litigation with Qualcomm. Finally, Intel’s new 3D XPoint memory could prove disruptive but likely comes at low margins and is subject to volatile memory pricing.

Shares of Intel were last seen down 1.6% at $34.31 on Wednesday, with a consensus analyst price target of $39.90 and a 52-week trading range of $30.44 to $38.45.

NVIDIA shares were trading up 0.5% at $157.92. The stock has a 52-week range of $44.57 to $168.50 and a consensus price target of $131.34.

AMD traded up close to 8% at $13.62, with a consensus price target of $12.66 and a 52-week range of $4.65 to $15.55.