Investors have been watching the intense rivalry between 2 titans: AMD and Intel. Both are trying to dominate the CPU market, with a focus on artificial intelligence also.
These giant chipmakers have competed against each other to provide the fastest and most efficient CPUs for their clients. However, their approaches to achieving market dominance differ.
AMD has focused on delivering high-performance, innovative technologies. Intel, on the other hand, has pursued a more diversified strategy, focusing on its foundry business and a renewed emphasis on efficiency. It is gradually reducing dependence on the PC-centric businesses by moving into data-centric businesses, such as AI and autonomous driving.
Company Highlights
Intel
Intel is expanding its manufacturing in order to create and accelerate its IDM 2.0 strategy. Intel has been in the process of restructuring to regain back its market share in the semiconductor sector.
Its latest Xeon 6 processors with Performance-cores (P-Cores) can support large AI workloads across diverse sectors. With industry-leading capabilities in AI processing, the Xeon 6 family delivers the industry’s best CPU for AI at a lower total cost of ownership. ⁽¹⁾
Intel’s AI solutions could benefit the semiconductor sector by lowering its costs, improving performance, and expanding more into AI. The company has received funding of $7.86 billion from the US government branch, the Department of Commerce, for its manufacturing projects under the US CHIPS and Science Act.
The funding could support Intel in advancing critical semiconductor manufacturing and advanced packaging projects in many US states, likely paving the way for innovation and growth. ⁽²⁾
AMD
AMD is focusing on generative AI, as the latest MI300 series accelerator strengthens its position in the competitive landscape in the AI environment. The accelerator is based on AMD CDNA 3 accelerator architecture and supports up to a large space of the HBM3 memory, enabling efficient running of large language model training and inference for generative AI workloads. It is also benefiting from strong enterprise adoption and expanded cloud deployments. ⁽³⁾
In addition, its strength in nanometer-based processors is expected to strengthen the company’s competitive position in the commercial and server market against Intel.
AMD is currently leveraging Taiwan Semiconductor Manufacturing Company’s 7 nm process technology, enabling it to deliver its advanced 7 nm chips faster to market. AMD Radeon RX 7900 series chip design combines 5 nm and 6 nm process nodes, each optimized for specific chips in the GPU. ⁽⁴⁾
AMD has acquired Enosemi, a builder of photonic integrated circuits, to expand its co-packaged optics offerings across AI systems. AMD also acquired server maker ZT Systems for $4.9 billion earlier this year to expand its portfolio of artificial intelligence chips and hardware, and to compete with AI giant Nvidia. ⁽⁵⁾
Financial Performance
Intel
Intel’s Q1 2025 earnings had beaten analysts’ estimates, as it issued cautious guidance, announcing plans to slash expenses in 2025 under CEO Lip-Bu Tan. Intel announced cost-cutting measures, targeting $17 billion in operating expenses (down from $17.5 billion) and $18 billion in capital expenditures for 2025. Layoffs, including management layer reductions, were planned to begin in Q2 2025 to streamline operations. ⁽⁶⁾
Intel’s Q1 2025 results showed resilience, with revenue and EPS beating expectations, driven by foundry and data center growth. But GAAP losses and a cautious Q2 outlook signals ongoing challenges. The stock’s volatility reflects investor concerns over profitability, competition in AI, and potential tariffs, despite cost-cutting efforts and strategic advancements in Intel 18A and AI PCs. ⁽⁷⁾
Intel’s stock price is up 1.6% YTD but down 33% from a year ago as the company encountered several issues and losses in mid-2024, which also led to the suspension of dividend payments.
AMD
AMD’s Q1 2025 earnings had beaten analysts’ expectations with strong results, driven by strong demand for EPYC CPUs and Instinct AI accelerators, positioning the company as a key player in the AI and data center markets. The 36% YoY revenue growth and margin expansion reflect operational efficiency and a favorable product mix. ⁽⁸⁾
However, the gaming segment’s decline and export controls pose challenges. The stock’s YTD underperformance of 6.57% contrasts with its strong fundamentals, suggesting market sentiment may be weighed down by broader semiconductor industry concerns, including competition and regulatory risks.
Source: Portfolio Labs. Chart comparing YTD price movements between AMD and Intel
Risks
Intel
Part of Intel’s revenue comes from China, which could pose a challenge as the US restricts chip exports to China. This shift poses a dual challenge for Intel, as it faces potential market restrictions and increased competition from domestic chipmakers.
The company is also lagging behind in the GPU and AI front compared to its rivals, such as Nvidia and AMD. Leading technology companies are reportedly piling up Nvidia’s GPUs to build clusters of computers for their AI work, leading to exponential revenue growth.
AMD
In the traditional computing market, which still generates a part of its revenues, AMD is up against Intel’s strong market position and could pose a threat to AMD.
AMD faces significant competition from Nvidia in the GPU market. AMD has had relatively greater success in the mobile segment and its current product lineup indicates that this focus will continue. However, competition in the mobile segment is likely to accelerate, with more ARM-based devices coming on the market.
Sector Outlook
The semiconductor sector is poised for more growth in 2025, driven by surging demand for AI and high-performance computing applications. Global chip sales are expected to reach over $700 billion due to innovation in generative AI and data center expansion. ⁽⁹⁾
However, the industry remains exposed to risks as traditional sectors such as PCs, smartphones, and automotive could face challenges due to supply chain disruptions and a ban on chip exports to China.
