AMD is now worth more than Intel
AMD achieved an astonishing feat on Wednesday — surpassing its biggest rival, Intel, in terms of market capitalisation.
At the close of the market on 16 February 2022, AMD had a total market cap of $197.75 billion (R2.98 trillion), compared to Intel’s $197.24 billion (R2.97 trillion).
AMD’s market cap surged after it completed its $49-billion (R735 billion) acquisition of programmable logic semiconductor and software maker Xilinx.
That resulted in 248.38 million Xilinx shares being converted into 428 million new AMD shares, boosting AMD’s total share count from 1.2 billion to 1.628 billion.
The significant milestone comes despite Intel still commanding roughly 75% of the overall x86 market share and generating more annual revenue and profit than AMD.
But investors appear more optimistic about AMD’s prospects.
This is evident when comparing the share price performance of the two companies over the last five years.
At the close of the market on 17 February 2017, AMD shares were trading at $13.13, while Intel shares stood at $36.48.
As of yesterday, AMD shares were up 825% to $121.47, while Intel’s only increased 33% to $48.44.
The charts below show the movements in share prices of AMD and Intel in the past five years.
AMD share price — 17 February 2017 to 16 February 2022
Intel share price — 17 February 2017 to 16 February 2022
Analysts have recognised CEO Lisa Su as one of the driving forces behind AMD’s impressive turnaround.
The company was on the edge of bankruptcy when Su took over in 2014.
Su spearheaded the development of AMD’s impressive Zen microarchitecture, first launched in 2016.
Now in its third generation, the chips based on this design are renowned for packing a large number of cores that provide excellent multi-core performance.
As a result, AMD has made gradual gains in the home PC and server markets, eating away at Intel’s slice of the pie.
AMD has also consistently remained Sony and Microsoft’s preferred chip for their PlayStation and Xbox gaming consoles.
Intel fighting back
Intel is also facing new competition from Apple, which previously used its chips for its Mac systems but started replacing these with its own M1 chips in 2020.
Apple has completely switched over to its own silicon, which offers improved performance and power efficiency.
Intel CEO Patrick Gelsinger has been punting a comeback plan that includes greatly improved performance that promise to outshine Apple’s designs.
Recent benchmarks of Intel’s 12th-gen Core i9-12900HK notebook processor show it beating Apple’s top-end M1 max in performance, but struggling in the power efficiency department.
Gelsinger also wants to steer Intel into becoming a chip foundry business that will produce semiconductors for third parties.
But investors have remained bearish on Gelsinger’s ambitious strategy, which requires significant expenditure.
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