Is It Too Late for Intel to Strike Back Against AMD?

Leo Sun, The Motley Fool

Mon, Apr 28, 2025, 5:45 AM 5 min read

Intel (NASDAQ: INTC) recently posted its first-quarter earnings report. The chipmaker's revenue came in flat year over year at $12.7 billion, which still beat analysts' estimates by $390 million. Its adjusted earnings per share (EPS) fell 28% to $0.13 but still cleared the consensus forecast by $0.13. Those headline numbers seemed stable, but its guidance was grim.

For the second quarter, it expects its revenue to decline from 3% to 13% year over year (compared to analysts' expectations for sales to remain flat), with an adjusted EPS of zero -- which also missed the consensus forecast of $0.07.

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In other words, investors shouldn't expect Intel's turnaround efforts to bear fruit anytime soon. But can the chipmaker's new CEO, Lip-Bu Tan, fix its ailing business and strike back against Advanced Micro Devices (NASDAQ: AMD) in the x86 CPU market?

Intel is still the world's largest manufacturer of x86 CPUs for PCs and servers. But between the third quarter of 2016 and the second quarter of 2025, Intel's share of the x86 market plummeted from 82.5% to 58.2%, according to PassMark Software, which compares PCs. AMD's share rose from 17.5% to 40.3%.

That disastrous decline was largely caused by Intel's failure to keep pace with Taiwan Semiconductor Manufacturing in the race to manufacture smaller and denser chips. AMD, which didn't manufacture its own chips, outsourced its production to Taiwan Semiconductor's superior foundries -- which enabled it to produce smaller, cheaper, and more power-efficient chips than Intel. Meanwhile, Intel -- which struggled with delays, shortages, and abrupt CEO changes as it tried to keep up -- lost a lot of its business to AMD.

But that wasn't Intel's only failure over the past decade. It also failed to crack the mobile chip market, which it ceded to Arm Holdings, while missing the seismic shift toward AI chips, which Nvidia dominates with its discrete GPUs. It also di-worsified its business with too many messy acquisitions, and then hastily divested them when they didn't pay off.

That's why Intel's annual revenue declined from $55.87 billion in 2014 to $54.23 billion in 2024. Over the past 10 years, its stock price fell 34% as the S&P 500 advanced 160%. AMD's stock surged a dizzying 3,950% during the same period as its CEO, Lisa Su, drove the underdog chipmaker to reboot its engineering process and capitalize on Intel's mistakes.