AMD(AMD) The Motley Fool·2025-01-25 13:20Semiconductor Market Overview - Intel shares fell about 60% last year, while AMD shares were down about 18% [1] - The semiconductor market is largely driven by artificial intelligence (AI), with Intel and AMD being afterthoughts [2] - AMD is the distant No 2 designer of GPUs behind Nvidia, while Intel's GPU market share dropped to zero from 2% in 2023 [2] AMD Performance and Challenges - AMD has struggled against Nvidia due to inferior software, with its GPUs deemed "unusable" for AI training without significant engineering support [3] - AMD has carved out a niche in AI inference, with customers using its GPUs for narrow, well-defined inference use cases [3] - AMD's data center revenue surged 122% YoY and 25% sequentially to 6 8 billion, with adjusted EPS jumping 31% to 1 9 billion, showing inroads into Intel's primary PC business [7] Intel Performance and Challenges - Intel's revenue declined 6% last quarter to 0 46 [6] - Intel's data center and AI segment saw revenue rise 9% to 7 3 billion [7] - Intel's Foundry segment reported a 2 7 billion excluding a noncash impairment charge [8] - Intel has spent 104 billion in physical assets [11] Valuation and Potential - Intel trades at a forward P/E of 12 6 times versus 17 6 times for AMD [10] - Intel's foundry business, if valued separately, could be worth about 11 4 billion [12] - Intel has been the subject of takeover rumors due to hidden physical assets and government funding [12] - AMD has been the stronger business, with potential in AI inference and a growing CPU business in data centers and PCs [13] Investment Outlook - Both Intel and AMD are considered turnaround candidates, with Intel offering deep value and AMD showing solid rebound potential [14]