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Yahoo
28-05-2025
- Business
- Yahoo
Intel vs. Advanced Micro: Which Chipmaker is the Better Buy Now?
Intel Corporation INTC and Advanced Micro Devices, Inc. AMD are two premier semiconductor firms competing in the CPU market, with both focusing on AI (artificial intelligence) and advanced chip technologies. Intel, reportedly the world's largest semiconductor company and primary supplier of microprocessors and chipsets, is gradually reducing its dependence on the PC-centric business by moving into data-centric businesses, such as AI and autonomous driving. The foundry operating model is a key component of the company's strategy and is designed to reshape operational dynamics and drive greater transparency, accountability and focus on costs and Micro has strengthened its position in the semiconductor market on the back of its evolution as an enterprise-focused company from a pure-bred consumer-PC chip provider. Its processors are primarily powered by the company's proprietary "Zen" CPU and "Vega" GPU architectures. The company's acquisition of Xilinx has helped in expanding into multiple embedded markets. AMD now offers Field Programmable Gate Arrays (FPGAs), Adaptive SoCs and Adaptive Compute Acceleration Platform (ACAP) products. With growing AI proliferation in PCs, smartphones, automotive and IoT applications, both Intel and Advanced Micro are steadily advancing their semiconductor portfolio to bolster their competitive edge. Let us analyze in depth the competitive strengths and weaknesses of the companies to understand who is in a better position to maximize gains from the emerging market trends. Intel is strategically investing to expand its manufacturing capacity to accelerate its IDM 2.0 (Integrated Device Manufacturing) strategy. The company is undertaking various strategic decisions to gain a firmer footing in the expansive AI sector. Its latest Xeon 6 processors with Performance-cores (P-Cores) can support large AI workloads across diverse sectors. With industry-leading capabilities in AI processing, the Xeon 6 family delivers the industry's best CPU for AI at a lower total cost of ownership. Intel's innovative AI solutions are set to benefit the broader semiconductor ecosystem by driving down costs, improving performance and fostering an open, scalable AI environment. The company has received $7.86 billion in direct funding from the U.S. Department of Commerce for its commercial semiconductor manufacturing projects under the U.S. CHIPS and Science Act. The funds will support Intel in advancing critical semiconductor manufacturing and advanced packaging projects in Arizona, New Mexico, Ohio and Oregon, likely paving the way for innovation and Intel derives a significant part of its revenues from China. As Washington tightens restrictions on high-tech exports to China, Beijing has intensified its push for self-sufficiency in critical industries. This shift poses a dual challenge for Intel, as it faces potential market restrictions and increased competition from domestic chipmakers. The company is also lagging behind in the GPU and AI front compared to peers such as NVIDIA Corporation NVDA and AMD. Leading technology companies are reportedly piling up NVIDIA's GPUs to build clusters of computers for their AI work, leading to exponential revenue growth. AMD is strengthening its footprint in the AI market through an expanding portfolio. The latest MI300 series accelerator family strengthens its competitive position in the generative AI space. The accelerator is based on AMD CDNA 3 accelerator architecture and supports up to 192 GB of HBM3 memory, enabling efficient running of large language model training (up to 80 billion parameters) and inference for generative AI workloads. It is also benefiting from strong enterprise adoption and expanded cloud addition, strength in 7-nanometer-based processors is expected to strengthen the company's competitive position in the commercial and server market against Intel. AMD is currently leveraging Taiwan Semiconductor Manufacturing Company's 7 nm process technology, which is enabling it to deliver its advanced 7 nm chips faster to market. AMD Radeon RX 7900 series chiplet design combines 5 nm and 6 nm process nodes, each optimized for specific chips in the in the traditional computing market, which still generates a chunk of its revenues, AMD is up against Intel's strong market position. With Intel systems so well entrenched, there is an obvious preference for system integrators to choose Intel processors over AMD. Moreover, AMD faces significant competition from NVIDIA in the GPU market. AMD has had relatively greater success in the mobile segment and its current product lineup indicates that this focus will continue. However, competition in the mobile segment is likely to accelerate, with more ARM-based devices coming on the market. The Zacks Consensus Estimate for Intel's 2025 sales implies a year-over-year decline of 4.3%, while that of EPS indicates growth of 323.1%. The EPS estimates have been trending southward on average over the past 60 days. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Advanced Micro's 2025 sales suggests year-over-year growth of 23.3%, while that for EPS implies a rise of 22.7%. The EPS estimates have been trending southward over the past 60 days. Image Source: Zacks Investment Research Over the past year, Intel has declined 33.8% against the industry's growth of 14.1%. AMD has lost 33.2% over the same period. Image Source: Zacks Investment Research Intel looks more attractive than Advanced Micro from a valuation standpoint. Going by the price/sales ratio, Intel's shares currently trade at 1.74 forward sales, significantly lower than 5.48 for AMD. Image Source: Zacks Investment Research Both Intel and Advanced Micro carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks companies expect their earnings to improve in 2025. However, Intel expects a decline in revenues contrary to that of AMD. Over the years, AMD has shown steady revenue and EPS growth, while Intel has been facing a bumpy road with a downhill slope. With a healthy long-term earnings growth expectation of 24.5%, Advanced Micro is relatively better placed than Intel (long-term earnings growth expectations of 10.5%), although the former is a bit expensive in terms of valuation metrics. Consequently, Advanced Micro seems to be a better investment option at the moment. 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 Intel Corporation (INTC) : Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
07-03-2025
- Business
- Yahoo
Will Intel Xeon 6 Processors Act as a Magic Wand for INTC Stock?
Intel Corporation INTC has garnered significant customer interest in the just concluded Mobile World Congress (MWC) event held in Barcelona, Spain, for its recently launched Xeon 6 processors with Performance-cores (P-Cores). This system-on-chip (SoC) has been designed to cater to the huge demand for high AI (artificial intelligence) workloads across diverse sectors. With industry-leading performance across data center workloads and up to two times higher performance in AI processing, the Xeon 6 family delivers the industry's best central processing unit (CPU) for AI at a lower total cost of ownership (TCO). Based on the x86 computer architecture, the new Intel Xeon 6700/6500 series processors are designed with high core counts and built-in acceleration for multiple segments. The processors deliver an average of 1.4x better performance than the previous generations available in the market. In addition, with a 5:1 consolidation of a 5-year-old server on average, the Xeon 6 processors enable significant performance-per-watt efficiency, resulting in up to 68% savings in TCO. Consequently, the new breed of Xeon 6 processors offers the perfect balance between performance and energy Intel Xeon 6 processor for network and edge platforms leverages Intel's built-in accelerators for virtualized radio access networks (vRAN), media, AI and network security to address the growing demand for network and edge solutions in an AI-driven world. It delivers up to 2.4x the RAN capacity and a 70% improvement in performance-per-watt compared to previous generations thanks to Intel vRAN Boost. Intel remains on track with its 5N4Y (five nodes in four years) program to regain transistor performance and power performance leadership by 2025. Intel Xeon 6 processor with Efficient-cores (E-cores), code-named Sierra Forest, marks the company's first Intel 3 server product architected for high-density, scale-out workloads. Intel Xeon platforms have reportedly set the benchmark in 5G cloud-native core with substantial performance and power-efficiency improvements, additional power-saving capabilities and easy-to-deploy software. This has triggered healthy demand trends from major telecom equipment manufacturers and independent software vendors to optimize and unleash proven power savings for a more sustainable has witnessed healthy traction in AI PCs that has taken the market by storm and remains firmly on track to ship more than 100 million by the end of 2025. Panther Lake – the chip based on Intel 18A and the architectural successor to the well-received Lunar Lake – is slated to be launched in the second half of 2025, while Clearwater Forest – the first Intel 18A server product – is likely to be unveiled in the first half of 2026. The company has introduced the Intel Core Ultra, which features a neural processing unit that enables power-efficient AI acceleration with 2.5x better power efficiency than the previous generation. With superior graphics processing units (GPU) and CPU capabilities, it can speed up AI solutions. The company also launched the new vPro platform with Intel Core Ultra processor that delivers enhanced power efficiency. With dedicated AI acceleration capability spread across the central processing unit, graphics processing unit and the new neural processing unit, it will unlock an endless new wave of AI experiences across all apps. With such innovative products, the company is gradually witnessing an uptrend in revenues over the past few quarters, although it appears to be significantly down from the year-ago tally. Image Source: Zacks Investment Research Intel has plunged 52.9% in the past year against the industry's growth of 24.5%, lagging its peers Advanced Micro Devices, Inc. AMD and NVIDIA Corporation NVDA. Much of this underperformance was due to severe financial difficulties and operational challenges, which forced management to undertake a comprehensive review of its businesses while implementing corporate restructuring in the top rungs. Image Source: Zacks Investment Research Earnings estimates for Intel for 2024 have moved down 106.5% to a loss of 9 cents over the past year, while the same for 2025 has declined 55.6% to 92 cents. The negative estimate revision depicts bearish sentiments for the stock. Image Source: Zacks Investment Research The recent product launches appear 'too little too late' for Intel. Although Intel has scaled its AI footprint, it seems to lag NVIDIA on the innovation front, with the latter's H100 and Blackwell GPUs being runaway successes. Leading technology companies are reportedly piling up NVIDIA's GPUs to build clusters of computers for their AI work, leading to exponential revenue growth. An accelerated ramp-up of AI PCs further affected the short-term margins of Intel as it shifted production to its high-volume facility in Ireland, where wafer costs are typically higher. Margins were also adversely impacted by higher charges related to non-core businesses, charges associated with unused capacity and an unfavorable product mix. China accounted for more than 29% of Intel's total revenues in 2024, making it the single largest market for the company. However, the communist nation's purported move to replace U.S.-made chips with domestic alternatives significantly affected INTC's revenue prospects. The directive to phase out foreign chips from key telecom networks by 2027 underscores Beijing's accelerating efforts to reduce reliance on Western technology amid escalating U.S.-China Trump has imposed a 10% levy on imports from China, which doubled the 10% duty slapped on Beijing in early February. As Washington tightens restrictions on high-tech exports to China, Beijing has intensified its push for self-sufficiency in critical industries. This shift poses a dual challenge for Intel, as it faces potential market restrictions and increased competition from domestic chipmakers. Moreover, weaker spending across consumer and enterprise markets, especially in China, resulted in elevated customer inventory levels, resulting in soft demand trends. Strict export control measures are further likely to affect the market dynamics, leading to below-par revenue growth in the near term. Intel has been facing challenges due to the disruptive rise of over-the-top service providers in this dynamic industry. Price-sensitive competition for customer retention in the core business is expected to intensify in the coming days. Aggressive competition is likely to limit the ability to attract and retain customers and affect operating and financial road ahead for Intel is bumpy and strewn with daunting challenges, and how it navigates these roadblocks in the coming days remains to be seen. Intel carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 Intel Corporation (INTC) : Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
09-02-2025
- Business
- Yahoo
Should INTC Be in Your Portfolio Post Healthy Q4 Earnings?
Intel Corporation INTC reported relatively healthy fourth-quarter 2024 results, with adjusted earnings and revenues beating the respective Zacks Consensus Estimate. The quarterly revenues were near the higher end of the company's guided range as Intel witnessed healthy growth in its core x86 architecture and strong interest in the Intel 18A process node. Despite solid traction from an accelerated ramp-up of artificial intelligence (AI) PCs, margins were significantly affected by cost-cutting initiatives to accelerate profitable growth. However, management envisions robust growth opportunities with a strong product roadmap and semiconductor ecosystem, likely setting it apart from the competition. The interim management has vouched that Intel's core strategy would remain unchanged despite efforts to drive operational efficiency and agility. The company aims to emphasize the diligent execution of operational goals to establish itself as a leading management observed that the company needs to witness a significant cultural change to transition from Integrated Device Manufacturing to being a world-class foundry. This would involve a shift from a 'no wafer left behind' mindset, where the company built extra capacity to meet demand (hoping that the added capacity would not be idle at any time) to 'no capital left behind' mindset that aims to drive efficiency by eking out every wafer possible from the existing capacity. Intel witnessed healthy traction in AI PCs that has taken the market by storm and remains firmly on track to ship more than 100 million by the end of 2025. Panther Lake – the chip based on Intel 18A and the architectural successor to the well-received Lunar Lake – is slated to be launched in the second half of 2025, while Clearwater Forest – the first Intel 18A server product – is likely to be unveiled in the first half of 2026. The company has introduced the Intel Core Ultra, which features a neural processing unit that enables power-efficient AI acceleration with 2.5x better power efficiency than the previous generation. With superior GPU and CPU capabilities, it can speed up AI solutions. The company also launched the new vPro platform with Intel Core Ultra processor that delivers enhanced power efficiency. With dedicated AI acceleration capability spread across the central processing unit, graphics processing unit and the new neural processing unit, it will unlock an endless new wave of AI experiences across all apps. Although Intel has scaled its AI footprint, it is lagging behind rival NVIDIA Corporation NVDA on the innovation front, with the latter's H100 and Blackwell graphics processing units (GPUs) being runaway successes. Leading technology companies are reportedly piling up NVIDIA's GPUs to build clusters of computers for their AI work, leading to exponential revenue growth. An accelerated ramp-up of AI PCs further affected Intel's short-term margins as it shifted production to its high-volume facility in Ireland, where wafer costs are typically higher. Margins were also adversely impacted by higher charges related to non-core businesses, charges associated with unused capacity and an unfavorable product mix. Intel has been facing challenges due to the disruptive rise of over-the-top service providers in this dynamic industry. Price-sensitive competition for customer retention in the core business is expected to intensify in the coming days. Aggressive competition is likely to limit the ability to attract and retain customers and affect operating and financial the pervasive growth of AI is driving an unprecedented demand for silicon chips to boost overall manufacturing capacity in the industry. Although Taiwan Semiconductor Manufacturing Company Limited has remained a valued supplier to Intel Products, a bitter U.S.-China trade relationship and strained geopolitical relations between China and Taiwan cast doubts over the former's ability to maintain uninterrupted chip supply to help Intel become a world-class foundry. Image Source: Zacks Investment Research The stock has plunged 54.7% in the past year against the industry's growth of 59.4%, lagging its peers Advanced Micro Devices, Inc. AMD and NVIDIA. Much of this underperformance is due to severe financial difficulties and operational challenges, which have forced management to undertake a comprehensive review of its businesses. Intel is mulling various options, including the potential split of its product design and manufacturing divisions and evaluating which factory projects should be terminated. It also plans to establish Intel Foundry as an independent subsidiary to unlock strategic benefits and improve capital efficiency with clearer separation and independence from the rest of Intel. The division incurred an operating loss of $2.26 billion in the fourth quarter. One Year INTC Stock Price Performance Image Source: Zacks Investment Research Earnings estimates for Intel for 2025 declined to 51 cents from 78 cents over the past seven days, while the same for 2026 has declined 19.6% to $1.19. The negative estimate revision depicts bearish sentiments for the stock. Image Source: Zacks Investment Research Intel's innovative AI solutions hold immense promise for the broader semiconductor ecosystem. By addressing the challenges of scalability, performance and interoperability, it is paving the way for widespread AI adoption across enterprises worldwide. Management is focusing on simplifying parts of its portfolio to unlock efficiencies and create value. It has aimed to allay investor concerns by reiterating its short-term guidance while maintaining core the recent product launches appear 'too little too late' for Intel. In addition, margin woes amid strict export restrictions, unfavorable product mix and elevated customer inventory levels weigh on its bottom line. With declining earnings estimates and abysmal price performance compared with its peers, the stock is witnessing a negative investor perception. With a Zacks Rank #3 (Hold), Intel appears to be treading in the middle of the road, and investors could be better off if they trade with caution. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 Intel Corporation (INTC) : Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report To read this article on click here. Zacks Investment Research Sign in to access your portfolio
