AMD Transforms Into Fierce Competition for Intel in Data Centers
AMD is heavily pressuring Intel in the server CPU market, thanks to the guidance of AMD Chair and CEO Dr. Lisa Su. As Wccftech notes, the company has gone from having no server CPU market share in 2017 to approaching 40% this year. AMD could be on track to hit 50% market share in fewer than 10 years from entering the space. That's a shocking success on AMD's part, and although there are many reasons for its success, a few stand out.
The most obvious source of AMD's success in challenging Intel for data center CPU share is Su. As the company's chair and CEO, Su oversaw multiple successes for AMD, including the rise of its Epyc CPUs, which challenged Intel's Xeon processors. Writing for ExtremeTech in 2019, Joel Hruska noted that Epyc processors were better-positioned to gain market share than AMD's previous major challenge to Intel in this segment.
Credit: AMD
'In 2005, AMD's dual cores matched Intel on core count, outperformed Intel clock-for-clock and core-for-core, and were quite expensive,' Hruska wrote. In 2019, AMD went for the trifecta, with higher performance, more cores, and lower per-core pricing. It's the most serious assault on Intel's high-end Xeon market that the company has ever launched.'
As AMD continued to produce successful Epyc processors and related products (such as its Instinct GPUs), its market share surged. According to DigiTimes Asia, AMD snagged 25% of the server processor segment by 2023. Now, with its segment market share at 39.4%, the chance to break even with Intel—and possibly overtake it—is in sight.
Obviously, AMD's success in the server CPU segment is resulting in massive revenue. In the first quarter of 2025 alone, AMD's data center segment brought in $3.7 billion, which marked a 57% year-over-year increase. In its quarterly report, AMD attributed that growth to its Epyc and Instinct sales.
Credit: Intel
Intel has struggled during this time. Its former CEO, Pat Gelsinger, focused heavily on rebuilding the company's chip manufacturing capabilities, but his tenure came to an end in late 2024.
Still, Intel is addressing AMD's gains. Early this year, it dropped the prices on its Xeon 6 CPUs by as much as 30%. The move kept many Xeons priced above AMD's CPUs, but made them more competitive. And the arrival of Intel's new CEO, Lip-Bu Tan, could mark a turning point for the chipmaker. But with AMD's sustained momentum in the CPU server segment, Intel will need to move quickly.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 hours ago
- Yahoo
AMD Is Gunning for Nvidia's AI Chip Throne. Should You Buy AMD Stock Now?
For the longest time, Nvidia (NVDA) has enjoyed an open runway in the data center and artificial intelligence GPU market. But on June 12, Advanced Micro Devices (AMD) made it clear that it was no longer content staying in the shadows. In a detailed reveal, the company introduced its upcoming Instinct MI400 series, a new breed of AI chips set to launch next year. 3 Highly-Rated Dividend Stocks You've Probably Never Heard Of (But Should) AMD Just Landed a New Microsoft Partnership. Should You Buy AMD Stock Here? The Crypto Rally Is 'Just Getting Started' According to Analysts. Buy Coinbase Stock Here. Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. These chips form the core of a larger vision called Helios, a full server rack capable of connecting thousands of chips into one powerful 'rack-scale' system. That architecture puts AMD head-to-head with Nvidia's Blackwell platform, which links together 72 GPUs in a single configuration. AMD also drew a line in the sand on inference performance. Its new chips come with more high-speed memory, making it possible to run massive AI models on a single GPU. As anticipation builds, let us see how high this can take the AMD stock. Advanced Micro Devices (AMD), based in Santa Clara, California, has carved out a formidable presence in the high-performance computing landscape with a market cap of $205.6 billion. AMD delivers one of the industry's most comprehensive portfolios of advanced processor technologies. In the last three months alone, AMD's stock has gained 22.5%, significantly outpacing the broader S&P 500 Index ($SPX), which rose by 5.4% in the same period. Currently, AMD trades at 40.2 times forward earnings and 8 times its sales. Both metrics sit below the five-year historical average. This signals a potential window for investors looking for exposure to the next wave of computing innovation. On May 6, Advanced Micro Devices stepped into the earnings spotlight and delivered a performance that raced ahead of Wall Street expectations. In its Q1 2025 results, the company posted revenue of $7.4 billion, marking a 35.9% increase from the same quarter last year and sailing past Wall Street's forecast of $7.1 billion. The showstopper in this story was AMD's data center segment, which pulled in $3.7 billion, registering a 57.2% year-over-year surge. The client and gaming segment brought in $2.9 billion. While the gaming unit struggled under pressure, sliding 29.8% to $647 million, the client business rose sharply, climbing 67.7% to reach $2.3 billion. The divergence between segments did not go unnoticed, yet the weight of the gains was strong enough to lift AMD's overall gross margin to 50%, up from 47% a year earlier. A stronger product mix and swelling demand for data center chips provided a firm foundation for this margin expansion. On the profit front, the company kept up its winning streak. Non-GAAP net income jumped 54.6% to touch $1.6 billion. Adjusted EPS also moved 54.8% higher, landing at $0.96 and ahead of analyst expectations of $0.93. In addition, AMD generated $939 million in cash from operations, while free cash flow for the quarter stood at $727 million. Peering into the second quarter of 2025, management expects revenue to hover around $7.4 billion, plus or minus $300 million. This includes a projected $700 million revenue reduction stemming from a new export license affecting MI308 shipments to China. Still, the midpoint implies 27% growth over the previous year. Analysts, however, expect some softness in profitability for the Q2 2025, projecting a 30% decline in EPS to $0.35. Yet the broader picture remains encouraging. For the full fiscal year 2025, the bottom line is expected to climb 20.6% from the previous year to $3.16. Looking further ahead, fiscal year 2026 is forecast to deliver even stronger growth, with EPS projected to rise 54% to reach $4.87. AMD holds its ground with quiet conviction, earning a 'Moderate Buy' consensus that reflects solid confidence from the analyst community. Among the 42 analysts tracking the stock, 28 issue a 'Strong Buy,' one backs a 'Moderate Buy,' and 13 advise to 'Hold.' The average price target of $133.32 represents potential upside of 5.5%. The Street-high price target of $200 implies shares could gain nearly 60% from here. On the date of publication, Aanchal Sugandh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
2 hours ago
- Yahoo
Advanced Micro Devices (NasdaqGS:AMD) Earnings Rise To US$7 Billion In Recent Quarter
This quarter, Advanced Micro Devices experienced a significant 20% increase in share price. This uptick aligns with major announcements, like its collaboration with Oracle to integrate MI355X GPUs into Oracle Cloud Infrastructure, offering improved price-performance for AI workloads. Partnerships with Infobell and mimik further highlight AMD's focus on AI innovation and cloud applications. The company's earnings announcement in May, with sales rising to $7.438 billion and net income markedly improving, also strengthened investor confidence. These developments would have added weight to the company's share price move, despite the broader market remaining flat over the last week. Buy, Hold or Sell Advanced Micro Devices? View our complete analysis and fair value estimate and you decide. Find companies with promising cash flow potential yet trading below their fair value. The recent surge in Advanced Micro Devices' share price, bolstered by strategic partnerships in AI and cloud computing, signifies potential growth in these lucrative markets. This aligns with analysts' expectations of accelerating revenue and earnings growth driven by increased demand for high-performance computing. Notably, the collaboration with Oracle for GPU integration into Oracle Cloud Infrastructure promises enhanced AI workload capabilities, potentially boosting AMD's revenue and solidifying its market position. These developments reflect positively on AMD's narrative, given the focus on diversification and resilience. Over the past five years, AMD's total shareholder return reached 155.97%. However, in the past year alone, AMD lagged behind the US Semiconductor industry, which saw a 7.3% gain. This disparity highlights the challenges AMD faces within a competitive landscape, marked by rivals like NVIDIA and evolving supply chain risks. Despite this, AMD's substantial long-term growth outlines a strong trajectory enhanced by its AI and cloud initiatives. In terms of valuation, the current share price of US$98.62 is close to the consensus price target of US$130.47 but above the more bearish target of US$76.70. This suggests mixed analyst sentiment regarding AMD's future prospects. The company's recent partnerships and innovations may positively impact revenue and earnings forecasts. Still, these must counteract regulatory barriers and heightened competition. Investors should consider AMD's position and its ability to maintain momentum amid evolving industry dynamics. Review our growth performance report to gain insights into Advanced Micro Devices' future. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NasdaqGS:AMD. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Sign in to access your portfolio
Yahoo
6 hours ago
- Yahoo
Advanced Micro Devices (AMD) Advances While Market Declines: Some Information for Investors
Advanced Micro Devices (AMD) ended the recent trading session at $128.24, demonstrating a +1.14% change from the preceding day's closing price. This change outpaced the S&P 500's 0.22% loss on the day. On the other hand, the Dow registered a gain of 0.08%, and the technology-centric Nasdaq decreased by 0.51%. Coming into today, shares of the chipmaker had gained 14.52% in the past month. In that same time, the Computer and Technology sector gained 2.98%, while the S&P 500 gained 0.45%. The investment community will be paying close attention to the earnings performance of Advanced Micro Devices in its upcoming release. In that report, analysts expect Advanced Micro Devices to post earnings of $0.54 per share. This would mark a year-over-year decline of 21.74%. Meanwhile, our latest consensus estimate is calling for revenue of $7.41 billion, up 27% from the prior-year quarter. For the full year, the Zacks Consensus Estimates project earnings of $3.92 per share and a revenue of $31.75 billion, demonstrating changes of +18.43% and +23.15%, respectively, from the preceding year. Investors should also note any recent changes to analyst estimates for Advanced Micro Devices. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook. Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model. The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 4.68% lower within the past month. At present, Advanced Micro Devices boasts a Zacks Rank of #3 (Hold). Investors should also note Advanced Micro Devices's current valuation metrics, including its Forward P/E ratio of 32.37. This denotes a premium relative to the industry average Forward P/E of 19.27. Investors should also note that AMD has a PEG ratio of 1.32 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Computer - Integrated Systems industry was having an average PEG ratio of 1.81. The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 57, finds itself in the top 24% echelons of all 250+ industries. The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Don't forget to use to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
