Both Advanced Micro Devices (AMD) and Intel have recently seen significant increases in investor value, largely due to the escalating global requirement for chips designed for artificial intelligence (AI) data centers. While both semiconductor companies are advancing their product lines to capture a larger segment of the AI chip market, they present different investment profiles.
Intel’s Momentum Fueled by Data Center Growth
Following its second-quarter 2026 earnings release on July 23, Intel announced robust performance in its data center and artificial intelligence (DCAI) segment. The company reported that revenue for DCAI reached $6.3 billion, marking a year-over-year increase of 59%. This growth rate represents a notable improvement compared to the 22% year-over-year expansion seen in Q1.
Intel’s positive trajectory is significantly supported by the rising demand for server Central Processing Units (CPUs) used in agentic AI applications. During its most recent earnings call, Intel stated that its “core server CPU franchise is growing faster than ever,” noting that the year-over-year expansion of its server CPU business was the strongest recorded in Q2. The company’s Xeon 6 server CPUs are experiencing such intense demand that they are among the fastest-growing products in its history.
Furthermore, Intel secured more customer contracts for its server CPUs via long-term strategic deals and is scaling up production capacity to meet this substantial demand. Beyond server CPUs, Intel is also developing bespoke AI processors, which are highly sought after due to their efficiency in inference-focused workloads. The revenue from this custom AI processor division reportedly jumped almost three times compared to the previous year, indicating that Intel is benefiting from its advanced chips across multiple business fronts.
Based on these factors, Intel anticipates an impressive 65% year-over-year rise in earnings per share for the current quarter, projecting $0.38. Analysts are forecasting a substantial 264% increase in Intel’s earnings per share throughout 2026. While consensus projections estimate a 30% jump next year, many experts suggest this figure may underestimate Intel’s potential growth, given the company’s focus on expanding production capacity and increasing output using the advanced Intel 18A node.
AMD’s Data Center Progress and Market Share Gains
Similar to Intel, AMD is a provider of server CPUs. However, a major driver of AMD’s data center business growth is its Instinct line of data center Graphics Processing Units (GPUs). The company reported that its data center business saw revenue jump 57% year-over-year in Q1, reaching $5.8 billion.
Although AMD has not yet released its second-quarter figures, the company provided guidance suggesting a $11.2 billion revenue for the recently concluded quarter, which points to a 46% increase year-over-year. This projected growth rate would be an improvement over the 38% revenue expansion recorded in Q1, indicating sustained strong performance in its data center division.
AMD has demonstrated a history of taking market share from Intel in recent quarters. Moreover, AMD recently informed investors that it now forecasts the server CPU market will generate $220 billion in total revenue by 2030, significantly raising its previous estimate of $120 billion. According to Mercury Research data, AMD currently holds a 46% revenue share within the server CPU market, positioning it for substantial long-term gains.
The company’s Helios rack-scale server platform is also expected to be a significant growth catalyst, given solid demand from major hyperscale cloud providers. Overall, the secular expansion of the AI chip market is poised to generate considerable earnings growth for AMD; analysts predict an 79% rise in earnings per share in 2026, followed by an 84% increase next year.
Investment Comparison and Outlook
While AMD’s data center revenue expansion rate may surpass that of Intel’s in Q2, the current financial outlook suggests different strengths. Currently, Intel’s bottom-line growth appears to outpace AMD’s, a trend that could continue into 2027 as Intel enhances production capacity and reduces operational costs.
Furthermore, analysts are generally more optimistic about Intel’s long-term growth potential. When comparing the two companies using metrics like price-to-forward earnings multiples and sales multiples, Intel is positioned as being less expensive relative to its projected future earnings compared to AMD. Consequently, given its ability to sustain rapid growth while maintaining an attractive valuation, investors may find that Intel stock has the potential to outperform AMD over the next year and a half, and potentially in the long term.
