Intel Was Worth About 28 Times as Much as AMD 10 Years Ago. Now AMD Is Worth About 60% More.

In late September 2016, Intel (NASDAQ:INTC) was worth about $177 billion. Advanced Micro Devices (NASDAQ:AMD) was worth around $6.2 billion. Put another way, the chip giant's market value was about 28 times as big as its smaller rival's.

Ten years later, the order has flipped. AMD's market value is now around $1 trillion, while Intel's is about $622 billion, putting AMD about 60% ahead. AMD even announced a deal on Sept. 28 to buy artificial intelligence (AI) firm World Labs for about $8.2 billion in stock -- more than AMD's total market value a decade ago.

And that happened in a year when Intel shares have more than tripled as I write this. I think how AMD got here says plenty about what Intel's turnaround still needs to prove.

Image source: AMD.

AMD took the data center

In 2016, the two companies weren't in the same league. Intel reported revenue of $59.4 billion and operating income of $12.9 billion that year. AMD's revenue was $4.27 billion, and it had an operating loss of $372 million.

What's more, Intel's data center group alone pulled in $17.2 billion, around four times AMD's total sales.

AMD's comeback in servers took years. Mercury Research estimated AMD's share of x86 server processor units at just 3.2% in the fourth quarter of 2018. A year ago, AMD had around 27% of that market. The firm's latest numbers show it at 33.2% in the first quarter of 2026 and 34.5% in the second. So the gains keep coming, seven years after that low. And AMD's share of desktop processors rose from 15.8% to 34.9% in the same stretch.

Showing how far the balance has shifted, AMD's data center segment more than doubled its revenue year over year in the second quarter of 2026, to $6.7 billion. That beat the $6.3 billion for Intel's data center and AI segment, even though Intel's segment grew a strong 59%. Granted, AMD's number includes the graphics processing units it sells for AI, too.

And AMD is now earning more on less. Its second-quarter revenue climbed 50% year over year to $11.5 billion, and its operating income came in at $2.0 billion. Intel's operating income was $1.8 billion on $16.1 billion in revenue. Both swung from operating losses a year before.

The manufacturing gap

Better chip designs arguably explain some of AMD's climb. But who made the chips might have mattered just as much.

AMD doesn't run its own factories. It released its second generation of EPYC server processors in August 2019, and it built them on what it called "leading-edge 7nm process technology." And in May, AMD said its latest server chips, code-named Venice, were ramping production on Taiwan Semiconductor Manufacturing's 2nm process.

Intel, though, makes chips at its own factories, so falling behind on manufacturing hurt its products directly. In July 2021, then-CEO Pat Gelsinger said Intel was speeding up its roadmap to get it on "a clear path to process performance leadership by 2025." Companies don't normally set that goal if they already hold the lead.

Can Intel's foundry win it back?

That history is why the foundry sits at the heart of Intel's turnaround. Its operating loss shrank to $2.1 billion in the second quarter of 2026, from $2.4 billion in the first quarter and $3.2 billion a year before. Revenue grew 31% year over year to $5.8 billion.

But nearly all of that revenue is from Intel itself. Outside customers brought in $293 million of it in the second quarter, around 5% of the total.

Intel has committed to finishing its next process, 14A. Its second-quarter 10-Q also says the size and speed of its manufacturing build-out will "ultimately be dictated by the amount of committed demand for Intel 14A" -- including from outside customers.

Winning that demand probably takes convincing chip designers like AMD that Intel can make their most advanced products as well as Taiwan Semiconductor can. It's the ground Intel lost, and I'd say the turnaround isn't done until Intel wins some of it back.

True, Intel's business is improving. Its operating income swung to a profit in the second quarter, and the foundry's losses are shrinking. But at around 57 times its expected 2027 earnings, Intel stock is pricier than AMD, the company that overtook it, at about 40 times its expected 2027 earnings.

I think Intel's share price already assumes a lot of that ground has been won back. For now, outside customers still make up around 5% of the foundry's revenue.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.