AMD vs. Intel: Which Is the Better Artificial Intelligence (AI) Chip Stock to Buy Right Now?
Both companies have been experiencing solid growth in their data center businesses, but one of them seems like the better bet.
Advanced Micro Devices (AMD) and Intel have both seen gains in their artificial intelligence (AI)-oriented chip sales to major data center operators. This year, AMD's shares have surged 137%, while Intel has gained 60%. However, AMD appears to be gaining on Intel in the AI chip market. AMD's data center segment revenue grew by 97% year-over-year, reaching $8.5 billion, compared to Intel's 78% increase to $7.3 billion in Q3.
AMD's GPUs and CPUs compete with Intel's focus on server CPUs, as its Gaudi series of data center GPUs didn't gain much traction. AMD CEO Lisa Su expects data center AI revenue to grow even faster than previously anticipated. Meanwhile, Intel anticipates a 30% increase in server CPU shipments in 2026 and 2027. AMD projects a 66% revenue growth for the current quarter, at $17 billion, versus Intel's 13% expected growth to $15.5 billion.
AMD's long-term EPS growth forecast of 118% in 2027 is significantly higher than Intel's 20%. AMD's stock trades at a lower valuation of 30 times forward earnings, compared to Intel's 35 times. Therefore, AMD appears to be the better semiconductor stock to buy right now, especially considering its lower valuation and faster growth potential.
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