Intel vs. AMD: Why the Market Share Number Is Misleading

Intel and AMD continue to compete fiercely in the market for x86 client CPUs, which power desktops and laptops. AMD has just crossed an important threshold, now controlling over 30% of this market, up from just 21.1% two years ago. Intel still holds the remaining 69.7% of this segment, but its share has been declining. AMD has gained ground in desktops, laptops, and servers, with desktop and server shares both rising to new highs.

However, the desktop market itself is shrinking due to rising memory prices, making new PCs more expensive. Despite this, AMD's shipments have held up better than Intel's, resulting in a share gain in a shrinking market. The chips for PCs are the least profitable part of the rivalry, but AMD is making impressive gains in the data center market, where its server share has climbed to 34.5%.

AMD's data center revenue more than doubled in the latest quarter to $6.7 billion. Analysts expect AMD's data center sales to double again by 2027 as hyperscalers like Amazon, Microsoft, and Google expand their use of AMD's chips. AMD also has a larger revenue share than its unit count suggests, thanks to its premium chips like X3D gaming processors and EPYC server parts.

Intel's dominance persists due to the significant switching costs for customers who have built their systems around Intel for years. While Intel maintains the majority market share, the trend across all segments points to AMD's continued growth. AMD outperformed the broader semiconductor sector with an outstanding 182% return over the past year, while Intel's stock has surged 265%.

However, Intel's revenue growth is its strongest in 15 years, indicating that the company is not finished yet. Momentum in the market clearly favors AMD, but Intel is still a significant player in the semiconductor industry.