Investment in artificial intelligence infrastructure is expanding from GPU chips to CPU processors, bringing new growth opportunities for Intel (Intel) and AMD (AMD). Since 2026, Intel's and AMD's stock prices have risen by 144% and 147% respectively, but there are significant differences between the two companies in terms of performance growth, profitability, and valuation. Intel relies on the rebound in demand for server CPU to drive business recovery, yet its wafer foundry division continues to incur losses; AMD, on the other hand, has expanded its market share in data centers with its EPYC server processors and Instinct AI chips, with second-quarter data center revenue growing by over 100% year-on-year. Barchart columnist Sushree Mohanty believes that, compared to Intel, which is still in the transition phase, AMD currently has a clearer advantage in profit growth.

AI Reasoning demand grows, CPU Becomes the focus of data center investment again

This round of AI investment boom was initially driven mainly by the demand from GPU. NVIDIA held a dominant position in the market thanks to its AI chips. However, as artificial intelligence applications have expanded from model training to inference, enterprise deployment, and autonomous AI intelligents, the role of CPU in data center infrastructure has increasingly come to attention.

GPU is mainly responsible for large-scale parallel computing tasks, while CPU handles general computing, system scheduling, and a variety of enterprise workloads. As the scale of the AI system expands, cloud computing companies and data center operators need to increase the deployment of both types of processors simultaneously. This change has created an opportunity for a resurgence in Intel's traditional CPU server business and also enables AMD to further expand the market share of EPYC processors in the server market.

Intel's data center revenue grew by 59%, but its wafer foundry business still incurred a loss of $2.1 billion

Under the leadership of CEO Chen Liwu ( Lip - Bu Tan ), Intel is advancing its business transformation, with a focus on restoring its competitiveness in the server CPU market.

In the second quarter of 2026, Intel's data center and artificial intelligence business ( DCAI ) achieved revenue of $6.3 billion, a year-on-year increase of 59% and a quarter-on-quarter increase of 24%; the department's operating profit reached $2.5 billion. This performance indicates that the server CPU business is once again becoming an important growth driver for Intel.

However, unlike AMD, Intel still has to bear the costs of building and operating its own chip manufacturing facilities.

In the second quarter of this year, Intel's wafer foundry business incurred a loss of $2.1 billion, reflecting the company's need to address profitability issues in its manufacturing operations while simultaneously striving to restore the competitiveness of its processors. Analysts expect Intel's earnings per share to be $1.04 in 2026 and to increase to $1.44 in 2027, representing a year-over-year growth of about 38%.

Calculated based on the expected earnings for 2027, Intel's current forward price-earnings ratio is approximately 62.3 times.

This means that investors have paid a high valuation for the future recovery of profits, but the company's wafer foundry business has not yet achieved profitability.

AMD Data Center Revenue Doubles, Setting New Server CPU Revenue Records for Five Consecutive Quarters

In contrast, AMD has already transformed the growing demand for data centers into stronger revenue and profit performance. In the second quarter of 2026, AMD achieved total revenues of $11.5 billion, a year-on-year increase of 50%. Of this, the revenue from the data center division reached $6.7 billion, a year-on-year increase of over 100%, accounting for approximately 58% of the company's total revenue. This division encompasses EPYC servers, CPU, and Instinct AI chips, so its growth has benefited from both the traditional demand for server computing and the expansion of AI infrastructure investments.

AMD has set a server CPU revenue record for five consecutive quarters, with both cloud computing and enterprise customer sales increasing by more than 70% year-on-year. The company also stated that its revenue share in the x86 server processor market has further increased. In terms of profitability, AMD achieved an adjusted earnings per share of $1.66 in the second quarter, a year-on-year increase of 82%; the adjusted gross margin reached 56%, and free cash flow was $1.6 billion.

Analysts expect that the earnings per share for AMD2026 will reach $6.49 this year, representing a year-on-year increase of 98%.

Based on the profit forecast for 2027, AMD has a forward price-earnings ratio of approximately 37 times, while its earnings per share are expected to increase by 117% year-on-year in 2027.

Key financial indicators comparison: AMD has faster growth, yet its valuation is actually lower.

Note: The product composition of the data center services of the two companies is different. The AMD data center department also includes AI chips, so the revenue growth rate cannot be entirely considered as the business growth rate of CPU.

From a valuation perspective, Intel's forward P/E ratio for 2027 is significantly higher than AMD, yet its expected earnings growth rate is relatively lower. This difference reflects the different investment logics of the two companies. Intel still relies mainly on expectations of business recovery to support its valuation; investors are betting on the restoration of its CPU competitiveness and a narrowing of losses in its future wafer foundry business. AMD, on the other hand, has demonstrated clearer growth prospects through increased market share in the server CPU sector, expansion of its AI chip business, and improved profits.

AMD plans to invest $8.2 billion in acquiring World Labs to further layout the next generation of AI computing.

In addition to the existing server CPU and AI chip businesses, AMD also plans to expand its presence in the field of next-generation artificial intelligence through mergers and acquisitions. The company has agreed to acquire World Labs for $8.2 billion, further entering emerging areas such as spatial intelligence, robotics, and physical artificial intelligence.

These technologies may generate new computing demands in the future, thereby creating market opportunities for AMD processors and system-level products. However, whether this acquisition can be translated into substantial revenue growth still depends on the commercialization progress of the relevant technologies.

In contrast, Intel's main tasks at this stage are still to expand processor production capacity, maintain product competitiveness, and improve the profitability of its wafer manufacturing business.

Wall Street is more optimistic about AMD; there is room for an increase in the target prices of both companies.

From the analysts' ratings, it appears that Wall Street currently holds a significantly more positive attitude towards AMD.

Among Intel's 46 covering analysts, 11 gave a 'strong buy' rating, 1 gave a 'moderate buy' rating, 32 recommended 'hold', and 2 gave a 'strong sell' rating. Intel's average target price is $115.58, corresponding to a potential upside of about 29%; the highest target price is $200.

Among the 47 covering analysts for AMD, 37 gave a "strong buy" rating, 2 gave a "moderate buy" rating, and the remaining 8 recommended "hold". No analyst gave a sell rating. The average target price for AMD is $653.74, corresponding to a potential upside of about 24%; the highest target price reaches $1250.

The article author believes that Intel's CPU business recovery indeed presents investment opportunities, but its manufacturing business losses, high valuation, and operational execution risks still pose challenges.

In contrast, AMD is not only expanding its market share in the CPU server market, but its data center business, which is growing at a rapid pace, has also been transformed into profits and cash flow.