AMD vs. Intel: Which Artificial Intelligence (AI) Chip Stock Has More Room to Run?
- AMD
- INTC
- NVDA
Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) have been multibagger investments over the past year, which isn’t surprising, given that both companies are seeing healthy growth in revenue and earnings driven by the fast-growing demand for their chips in artificial intelligence (AI) data centers.
While AMD stock has soared 285% over the past year, Intel’s gains have been even more stunning at 322%. Investors will now be wondering whether to buy these semiconductor stocks following such impressive gains. The good news is that both Intel and AMD have room to fly higher.
Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger.Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout.Continue »
However, if you have to choose one of these stocks for your portfolio, which one should it be? Let’s find out.
AMD and Intel serve similar end markets, but one of them is in a more advantageous position
Both Intel and AMD design and/or manufacture central processing units (CPUs). These chips are used in personal computers and data centers. The demand for CPUs in AI data centers has taken off lately, driven primarily by their important role in handling inference and agentic AI tasks.
AMD noted earlier this year that the ratio of CPUs to graphics processing units (GPUs) is now shifting from 1:4/1:8 in AI data centers to 1:1. This paradigm shift away from GPUs in AI data centers is creating a terrific growth opportunity for both AMD and Intel. According to AMD, the server CPU total addressable market (TAM) could increase at a compound annual growth rate (CAGR) of more than 50% through 2030, hitting $220 billion by the end of the decade.
Intel and AMD are involved in a tussle to get ahead of each other in this market. It is worth noting that Intel is currently the larger player in server CPUs, controlling 65.5% of this market AMD controls the rest of the server CPU space, but its share has been growing at a nice clip. In fact, AMD gained 7.2 percentage points of the server CPU market on a year-over-year basis in Q2
At the same time, AMD is a more diversified AI data center company due to its presence in the GPU market. Its Instinct line of data center GPUs is witnessing widespread adoption by major customers such as OpenAI, <a href="https://myappsplus.com/meta-did-a-one-more-thing-and-its-an-ai-tamagotchi/” title=”Meta Did a 'One More Thing' and It's an AI Tamagotchi”>Meta Platforms, Anthropic, and others. So, AMD is in a stronger position to capitalize on the fast-growing demand for AI compute due to its diversified product lineup.
