Once upon a time, Intel (INTC +3.39%) reigned as the king of chipmakers. However, the tech giant no longer sits on the throne. Nvidia (NVDA +1.10%) took its spot.
That's not even the worst news for Intel. The company isn't the top contender against Nvidia. Instead, another agile chip challenger looks far better positioned for the next wave of growth in the artificial intelligence (AI) market – Advanced Micro Devices (AMD +0.23%).
Image source: Getty Images.
A comeback interrupted
Until recently, a strong argument could be made that Intel was gaining ground. New CEO Lip-Bu Tan wrote to employees in March 2025 about seizing "an opportunity to fundamentally reinvent an industry icon." Intel made progress toward building a world-class foundry. The company unveiled its Panther Lake architecture, the first platform for AI personal computer chips built on Intel's 18A technology.
Intel's stock performance also looked promising. Shares soared 84% in 2025 and vaulted more than 45% higher during the first few weeks of 2026. However, Intel's stock momentum screeched to a halt last week, with shares sinking more than 20%.
NASDAQ: INTC
Key Data Points
The company reported a 4% year-over-year decline in revenue in the fourth quarter of 2025. Intel expects even further revenue erosion in the first quarter of 2026. The harsh reality is that only a few years ago, Intel held a commanding 85% to 95% market share of the server CPU market. Two quarters ago, Tan revealed that this percentage had fallen to around 55%.
Those results don't further the turnaround story Tan envisioned when he became Intel's CEO last year. He hoped to "pull off a comeback that will be studied in business schools for generations to come." Perhaps that goal will still be achieved, but AMD could make things difficult for Intel
On the rise
AMD continues to gain server CPU market share at Intel's expense. It's a similar story in the desktop CPU market.
The company believes it's on track to capture the lead in the server CPU market, thanks to the popularity of its EPYC processors. In particular, AMD's next-generation EPYC Venice CPUs have a tremendous opportunity as AI adoption drives greater demand for CPUs.
However, AMD isn't only challenging Intel. The company is also Nvidia's biggest competitor in the GPU market. The Instinct MI350 Series GPU lineup is the fastest ramping product in AMD's history. AMD hopes to gain even more market momentum with its MI450 Series, expected to launch later this year. It also plans to expand its leadership in the adaptive computing market and capture a market share of over 70%.
AMD is targeting a revenue compound annual growth rate (CAGR) of more than 80% over the next three to five years. The company expects an overall revenue CAGR of more than 35%.
While Intel's stock momentum has faltered in recent days, AMD is forging ahead. The consensus Wall Street 12-month price target reflects a potential upside of around 14%.
NASDAQ: AMD
Key Data Points
Agility wins in the AI era
The contrast between these two rivals is striking. Intel's revenue is declining; AMD's revenue is soaring. Intel is losing market share; AMD is gaining market share – on multiple fronts. Intel is hoping for a comeback; AMD is continuing a well-planned challenge to the chip industry's top dog, Nvidia.
I think the key lesson from the tale of these two chipmakers is that agility wins in the AI era. AMD moved quickly to develop CPUs and GPUs to serve a rapidly evolving market that was dominated by AI.
This tale won't necessarily end with one big winner and one big loser. It's possible that both Intel and AMD could deliver market-beating gains for investors over the next few years. However, if you're looking for the stock with the greater likelihood of success, I think the smart money will be on AMD.
