Key points
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AMD’s data center business is already rapidly scaling, with segment revenue up 39% year over year in the fourth quarter.
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Intel’s turnaround still depends on several moving parts.
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By some metrics, Intel appears to be the cheaper investment. But AMD seems like the least risky way to invest in the AI compute expansion today.
The artificial intelligence (AI) super cycle is creating enormous opportunities in chips and data center infrastructure. And at a glance: both Advanced micro devices (NASDAQ: AMD) And Intel (NASDAQ: INTC) seem like reasonable ways to invest in that trend. Both have products tied to AI data centers, and both are trying to capture a bigger share of the next wave of computing demand.
But comparing the two, I think one of these two chip companies is a better choice than the other in the long run: AMD.
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Intel may have more potential if the turnaround goes well. But AMD already has a more established business in key growth areas – and that arguably gives the company a significantly lower risk profile at this point.
The AMD logo next to the Intel logo.
Image source: The Motley Fool.
AMD’s momentum
AMD’s latest results look like what investors should expect from an AI supercycle stock.
The company’s fourth-quarter revenue rose 34% year over year to a record $10.3 billion. Driving this growth, AMD’s data center revenue increased 39% to $5.4 billion, driven by EPYC server processors (high-performance x86 processors for servers and data centers) and the continued increase in shipments of Instinct graphics processing units (GPUs).
Momentum is also strong across the year. AMD’s 2025 revenue rose 34% to $34.6 billion, while data center revenue rose 32% to $16.6 billion. AMD also generated $4.3 billion in net revenue this year.
And the company expects this momentum to continue.
AMD said first-quarter 2026 revenue should be about $9.8 billion, plus or minus $300 million, representing about 32% year-over-year growth at the midpoint. Lisa Su said in AMD’s fourth-quarter earnings call that the company is entering 2026 with “strong momentum” as it accelerates adoption of EPYC and its Ryzen CPU processors and scales its data center AI business.
The balance sheet also helps make a good case for the stock. AMD ended 2025 with approximately $10.6 billion in cash, cash equivalents and short-term investments (up 106% year over year) and approximately $3.2 billion in total debt. The company achieved a record in the fourth quarter alone free cash flow of approximately $2.1 billion.
Intel still has too many things to prove at once
Intel’s business is certainly showing notable improvement in some areas.
The data center and AI segment grew 9% year over year in the fourth quarter and 5% for the full year 2025. But not only is that growth slower than AMD’s, but the overall picture still looks much messier. Intel’s fourth-quarter revenue fell 4% year over year to $13.7 billion, and full-year revenue was essentially flat at $52.9 billion. In addition, the client computing group’s revenue fell 3% this year and Intel Products’ total revenue fell 1%.
The bigger problem is that Intel is still trying to solve too many things at once.
The Intel foundry segment generated $17.8 billion in revenue in 2025, but also posted an operating loss of $10.3 billion. Meanwhile, Intel’s guidance for the first quarter of 2026 calls for non-GAAP (adjusted) earnings per share of $0.00.
Cheaper is not always safer
At the time of writing, AMD’s market cap is about $359 billion, compared to about $255 billion for Intel. Furthermore, on a price-to-sales basis, Intel shares are much cheaper. Intel trades at about four times revenue over a twelve-month period, and AMD trades at about 10 times revenue. So yes, Intel looks cheaper at first glance. But I think that discount reflects the very real risks Intel faces. At Intel, investors have a lot of work to do, including scaling its foundry operations, success with new products, margin expansion and improved financial discipline.
With AMD, investors are betting on a stock that is already profitable and growing rapidly.
AMD is of course not without risk. Nvidia is still the dominant AI chip company, and hyperscalers love it Amazon And Alphabet are investing heavily in their own custom AI silicon.
All that said, if I had to pick just one of these stocks today, I’d buy AMD. I think this is the more attractive stock because it gives investors exposure to the AI supercycle through a more established business in areas where strong demand is already visible – particularly data center CPUs and AI accelerators.
Intel stock could work out if the turnaround continues to gain momentum. But I think AMD is the stock that is likely to make investors richer from now on – especially over a long period of time, say ten years – because the path is simpler, the evidence is stronger and the risk profile is lower.
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Daniel Sparks and his clients have no positions in the stocks mentioned. The Motley Fool holds positions in and recommends Advanced Micro Devices, Alphabet, Amazon, and Intel. The Motley Fool has a disclosure policy.
