According to analysts, Intel Corp’s recent focus on developing chips to match expanding demand will allow Advanced Micro Devices Inc (AMD.O), its main competitor in the server and PC industry, to gain a stronger footing in the area.
From 2023 to 2026, Intel anticipates sales from its PC segment to increase in the low to mid-single digits, and revenue from its data center and AI division to grow in the high teens, according to the company, which plans major expenditures in chip technology over the next four years.
On Friday, the company’s stock dropped by around 6%, while AMD’s stock dropped by 1%.
When AMD concluded its $50 billion Xilinx deal earlier this week, its market cap momentarily surpassed Intel’s. AMD is presently around $1 billion short of Intel’s $182 billion market valuation, and both companies are considerably behind Nvidia (NVDA.O), which has a market cap of $585 billion.
In 2018, AMD had a market share of less than 5% in servers, but today has 15%. According to WestPark Capital analyst Ruben Roy, this might reach 25%. AMD’s market share in PCs, he predicts, will rise to the upper 20s from its present 18% to 20% level.
“We think share gains will continue as Intel tries to catch up on manufacturing process tech.”
But Wall Street is less enthused with Intel’s latest chip plans, which analysts said lacked “credibility” amid tough competition, and include muted gross margin growth and aggressive spending. Piper Sandler analyst Harsh Kumar said there was no imminent threat to Nvidia and AMD from Intel’s ambitious roadmap. “Intel only plans to find its normal cadence but is not really expected to take any meaningful share.”
Once a market leader in the semiconductor space, Intel gave up its spot to Samsung Electronics in 2021 for the first time since 2018, Gartner data showed, while AMD jumped to the tenth spot from 14.
