Both Intel (INTC +13.96%) and Advanced Micro Devices (AMD +11.44%) are coming off big first quarters: Both companies delivered strong results, gave strong guidance, and saw their stocks take off.
The two chipmakers share one main commonality: They are major manufacturers of central processing units (CPUs), demand for which has surged due to the rise of agentic artificial intelligence (AI). AI agents work autonomously based on their initial instructions to complete specific tasks, from organizing files on someone’s computer to assisting a business with customer service or fraud detection.
While graphics processing units (GPUs) got most of the attention in earlier phases of the AI trend because they provide the type of computing power that’s most needed when training AI models, CPUs play a critical role in helping AI agents execute tasks by overseeing memory usage, coordinating workloads, and extracting certain data needed for tasks.
So between Intel and AMD, which stock is a better buy now for the agentic AI boom?
Image source: Getty Images.
Intel: From bust to boom in less than a year
It wasn’t too long ago that Intel looked more like a dead man walking than a hot stock opportunity. But now, the stock is up over 186% year to date.
Investors believed the company had missed out on the AI story, as the CPU-focused chipmaker had served older types of technology devices. Intel lacked a strong presence in GPUs, which provide much of the computing power for large language models’ training and inference workloads.
While the resurgence in CPUs seems to have happened quickly, Intel has been working on its turnaround for many years. In 2021, the company began refocusing on its foundry model, which comprises internal CPU manufacturing and control over the full stack from fabrication to packaging. In 2024, Intel formally launched Foundry, specifically for the AI era.
While Intel specializes in CPUs, it also has ambitions to make GPUs for data centers and has hired Eric Demers, formerly of Qualcomm, to lead this important initiative.
Today’s Change
(13.96%) $15.30
Current Price
$124.92
Key Data Points
Market Cap
$628B
Day’s Range
$111.80 – $130.57
52wk Range
$18.96 – $130.57
Volume
228M
Avg Vol
109M
Gross Margin
35.90%
The rise of agentic AI seems to have turbocharged Intel’s turnaround, as it has always been a leader in CPU design. In the first quarter, Intel beat earnings estimates by a wide margin while providing second-quarter revenue guidance well above analysts’ consensus expectations. Data center revenue surged 22% to over $5 billion in the quarter.
“The ratio of CPUs to GPUs [in AI servers] used to be 1-to-8, and now it is 1-to-4, and I think it could move toward parity or even better,” Intel CEO Lip-Bu Tan said on the company’s recent earnings call. “We have made a lot of changes in terms of CPU architecture to optimize for different workloads.”
The good news for Intel is that as the addressable market for its CPUs widens, it will have much greater appeal, particularly because it controls the full stack. But Intel is still losing money on a generally accepted accounting principles (GAAP) basis.
And even with projected adjusted earnings per share of $1.08 in 2026, the stock trades at over 104 times forward adjusted EPS and at close to 9.7 times forward sales.
For this reason, investors may want to keep the stock on their watch lists, or start with a small position and dollar-cost average into it to allow the company more time to grow into its valuation.
AMD: A fabless model and larger GPU presence
AMD also had an outstanding quarter, with earnings, revenue, and second-quarter guidance all beating expectations. Its data center revenue increased 57% year over year, driven by strong CPU demand as well as GPU demand.
With CPU demand driven by agentic AI, AMD CEO Lisa Su now expects the compound annual growth rate (CAGR) for CPUs to surpass 35% in the coming years, bringing the total addressable market to over $120 billion by 2030.
AMD differs from Intel in that it’s a fabless chip company, meaning it designs its CPUs but doesn’t manufacture them in-house. The company relies on Taiwan Semiconductor to handle most of its production.
Today’s Change
(11.44%) $46.73
Current Price
$455.19
Key Data Points
Market Cap
$742B
Day’s Range
$418.23 – $456.32
52wk Range
$106.98 – $456.32
Volume
2.7M
Avg Vol
39M
Gross Margin
47.09%
AMD is also further along than Intel in the data center GPU game, with major customers such as Meta Platforms buying its GPUs. The company also makes custom chips designed to handle hyperscaler AI workloads.
There are certainly some pros and cons to both companies. Intel controls the full stack for its CPUs, giving it greater control over its own destiny, but it still has a long way to go with GPUs. Being fabless, AMD is more reliant on Taiwan Semi. This is good in one sense because it allows AMD to run a much less capital-intensive business. But if Taiwan Semi runs into capacity issues at some point, that could limit AMD.
Trading at 57 times forward expected earnings and 14 times forward sales, AMD seems like the better bet right now, although things could change if Intel is successful with GPUs.
However, given the big run-ups that both stocks have already had this year, I think it makes sense to pause and wait for better entry points, or start with a small position and dollar-cost average your way toward a larger one. Some future hoped-for success has already been priced into both companies’ shares.
