What AMD's Earnings Beat Could Mean for Intel
Key Points
AMD's success will ultimately lift competitors such as Intel.
The U.S. federal government has taken a nearly 10% stake in Intel.
Both stocks skyrocketed in the past year on high chip demand.
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There's no denying that Advanced Micro Devices (NASDAQ: AMD) is an absolute force to be reckoned with as it just reported another extraordinarily strong quarter. The ripple effects from AMD's success are spreading across the industry as well. This includes its rival, Intel (NASDAQ: INTC).
AMD's earnings report was impressive across several metrics. Revenue reached $10.2 billion in the first quarter of 2026, a 38% increase from last year. Gross profit was up 45%, and net income grew an impressive 95%. Data center revenue drove much of AMD's excellent performance. The segment brought in $5.8 billion, a 57% increase from the same quarter last year.
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The forward outlook for AMD is just as bullish. Guidance for the second quarter was above analysts' expectations. So what exactly does this mean for Intel?
On the positive side, broad demand for AI compute isn't slowing down. A rising tide lifts all boats, and there's no doubt Intel will benefit. On the other hand, in head-to-head competition, AMD appears to be winning.
AMD's market share is growing, and it's been chipping away at Intel's business for some time now. AMD and Intel announced a collaboration that could benefit Intel more than it benefits AMD, but it's nonetheless a good thing for both companies.
Intel and AMD are the primary companies manufacturing x86 chips. This is where AMD has been directly challenging Intel's long-standing dominance.
While Intel has the backing of the U.S. government, AMD has incredible momentum and a stellar CEO in Lisa Su. Intel will likely benefit from the industry's overall upward trajectory, but it's hard to see a scenario in which it beats AMD or Nvidia over the long term.
In the past year, AMD's stock has risen 351%, whereas Intel's has skyrocketed nearly 491%. Ultimately, in the short-term AMD's earnings beat is good news for Intel and other competitors. Over the long term, the prospects aren't as certain. Intel needs to continue executing on its turnaround strategy without losing too much market share to AMD and Nvidia.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Nvidia. The Motley Fool has a disclosure policy.
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