Intel’s sales growth in the data center market will slow this year, according to a small Wall Street firm.

Northland Capital Markets lowered its rating to underperform from market perform for Intel shares, citing rising competition from AMD and Nvidia.

“Workloads in Data Centers are shifting to AI. This we believe is increasing the use of GPU [made by AMD and Nvidia] and ASICs and reducing the importance of CPUs,” analyst Gus Richard said in a note to clients Monday. “We expect server growth to slow in Q3. … After Q2 earnings no clear catalyst this year.”

The company’s shares fell 4 percent on Monday.

Richard reduced his price target for Intel shares to $45 from $53, representing 18 percent downside to Friday’s close.

The analyst predicts Intel’s sales growth in its data center segment will peak at 25 percent in its second quarter, then drop to 20 percent in its third quarter and fall to 11 percent in its fourth quarter.

“In our opinion, process is critical in driving product leadership in the x86 market. AMD is moving to TSMC at 7nm, and it has access to a competitive 14nm process today,” the analyst said. “We expect that AMD will sample a 7nm server CPU in 2H:18 and move into production in 2019 likely in lock step or slightly ahead of INTC.”

Intel did not immediately respond to a request for comment.

— CNBC’s Michael Bloom contributed to this story.