Score another notable win for chip giant AMD (AMD) against its heated rival Intel.
AMD’s market cap currently stands at $188 billion after shares rose nearly 2% in Tuesday’s session. Intel’s market cap is $182 billion. That marks the second time in a week AMD’s market value has climbed above Intel — the first time it happened was a week ago.
Followers of this battle may not be surprised to see this one happen (and seeing it continue from here) for several reasons.
First, AMD has been winning the battle on Wall Street for sexier investment thesis.
AMD last week closed on its $35 billion acquisition for Xilinx.
The transaction — the largest in AMD’s 53-year history — gives the company significant expertise in the programmable chip market. Chips of this kind will prove integral as AMD looks to continue taking market share away from Intel in cloud computing workloads and data centers.
AMD CEO Dr. Lisa Su told Yahoo Finance Live the company will update its financial model “in the coming months.”
Meanwhile, Intel responded to AMD of sorts by announcing the purchase of Tower Semiconductor for $5.4 billion. The deal — which analysts see as less sexy than AMD’s Xilinx transaction — will aid Intel in its bid to build chips for other companies.
Secondarily, AMD has flat out posted better financials than Intel (for some time) as it has gained market share in key areas (notably in servers).
AMD’s sales and profits rose 68% and 117%, respectively in 2021. The company outlined 31% revenue growth for 2022 and gross profit margins of 51%.
Intel’s 2021 sales and earnings increased 2% and 7%, respectively. The company sees sales in 2022 rising about 2%. Profits are expected to drop 36% as Intel further builds out its chip-making capacity.
“We continue to see AMD well-positioned with continued PC, Data Center market share gains, GM [gross margin] strength with technology transitions,” said Mizuho Securities analyst Vijay Rakesh.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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