Advanced Micro Devices (AMD -3.90%) and Intel (INTC -5.34%) have helped fuel the ongoing artificial intelligence (AI) revolution. Both companies have been handsomely rewarded for their work. Their revenues and earnings have increased significantly, and over the past 12 months, AMD's shares have climbed 299%, while Intel's have risen 211%. Both stocks could continue delivering strong returns over the medium term, but which one has more upside? Let's find out.
Image source: The Motley Fool.
Recent financial results
AMD and Intel are both leaders in the CPU (central processing unit) market and have capitalized on soaring data center demand for their products since the start of the ongoing AI boom. However, things may be getting even better for both companies. The next wave of AI may focus on agentic systems that can organize, plan, and execute tasks autonomously. Agentic AI increases the importance of CPUs.
Here's why. Whereas GPUs (graphics processing units) are designed specifically to perform huge numbers of calculations at once, which makes them ideal for training AI models, CPUs excel at handling sequential tasks and coordinating various parts of a computer system, which is precisely what AI agents do as they work toward goals. AMD has argued that thanks to agentic AI, the GPU-to-CPU ratio will go from as much as 8-to-1 in the early days of the AI revolution to closer to 1-to-1.
NASDAQ: AMD
Key Data Points
Both companies could cash in on this. In fact, they already are. Consider AMD's second-quarter results. The company's revenue increased 50% year over year to $11.5 billion. AMD's data center segment posted $6.7 billion in sales, up 107% compared to the year-ago period. Meanwhile, the company's non-GAAP operating income was $3.1 billion, up 245% from the year-ago period, while its non-GAAP earnings per share (EPS) were $1.66, up 246% year over year. It was another solid quarter for AMD.
Its competitor, Intel, also performed well. Intel's second-quarter revenue grew 25% year over year to $16.1 billion. Data center and AI revenue jumped 59% year over year to $6.3 billion. The company turned an operating loss of $3.2 billion in the second quarter of 2025 into operating income of $1.8 billion this time around, while its non-GAAP EPS was $0.42, substantially better than the prior-year loss of $0.10 per share.
NASDAQ: INTC
Key Data Points
Comparing the two
Intel generates higher revenue and has a greater share of the CPU market. However, there are several reasons AMD might be the better option right now. Let's consider three of them. First, AMD is growing its revenue faster. It isn't just because AMD generates lower sales: The company's data center segment in the second quarter was $6.7 billion, compared to Intel's data center and AI business revenue of $6.3 billion. Yet, in this area, AMD's sales grew significantly faster.
That brings us to our second point: AMD has been gaining market share from Intel in recent quarters. If these trends continue, AMD may sustain higher sales growth than its competitor over the next few quarters. Third, Intel has faced significant manufacturing challenges in recent years, contributing to its market share losses. The company has worked hard to fix these issues, and it has made significant progress. However, these arguably haven't completely disappeared.
AMD adopted a different strategy and completely outsourced chip manufacturing, which has helped it avoid Intel's struggles. Lastly, AMD appears much more attractively valued. The company is trading at 39.5x forward earnings, compared to 63.3x for Intel and an average of 20.9x for information technology stocks. Intel turned a non-GAAP net loss into net income in the second quarter. Still, over the medium term, AMD's advantages may allow it to grow earnings faster, making it the more attractive stock from a valuation standpoint. So, for all those reasons, my view is that AMD has more upside than Intel.
