Better Semiconductor Stock for 2026: AMD vs. Intel

Core Insights - AMD is expected to gain market share in CPUs by transitioning to a 2-nanometer process node, with its Zen 6 CPU being the first on TSMC's 2nm node, enhancing performance while managing power consumption [1] - AMD's market share in PC CPUs rose by 1.4 percentage points to 25.4% and in server CPUs by 3.6 points to 27.8% in Q3 2025 [2] - Revenue for AMD increased by 35% year-over-year in the first three quarters of 2025, with net income rising by 244% to $2.8 billion [3] - The semiconductor industry is projected to grow by 26% in 2026, reaching $975 billion, benefiting companies like AMD and Intel [4] - AMD anticipates annualized revenue growth of over 35% for the next three to five years, up from 21% in the past five years, and expects operating margins to rise to 35% [8] AMD Specific Insights - AMD's 2nm chips will support a broader range of AI workloads, with the data center market opportunity expected to grow at over 40% annually for the next five years [7] - Shipments of AI PCs are projected to increase by 83% in 2026, contributing to AMD's growth [7] - Analysts predict a 62% increase in AMD's earnings for 2026, significantly higher than the 20% growth expected in 2025 [9] - AMD's stock has risen by 72% in 2025, driven by strong demand for its chips across various sectors [4] Intel Specific Insights - Intel's share price increased by 87% in 2025 due to positive developments and investments from major firms [10] - The company has a strong cash position of nearly $31 billion, allowing for increased production capacity [11] - Intel's revenue is expected to grow by 2.5% in 2026, with a projected earnings increase of 76% due to cost-saving measures [15] - Despite a forecasted 1% revenue drop in 2025, Intel is expected to post an adjusted profit of $0.34 per share [14] Comparative Insights - Both AMD and Intel are on track for healthy earnings growth in 2026, but AMD's growth is driven by revenue and earnings increases, while Intel's is primarily from cost optimization [16] - AMD is considered a more attractive investment compared to Intel based on current valuations and growth prospects [16]