Author: David de Jongh
Publication date: 13.09.2024
In a world which is constantly evolving and where the rapid development of Artificial Intelligence (AI) is transforming the business world in a rate that we have never seen before, semiconductor companies like Intel and AMD are at the forefront of this technological revolution. These tech giants are making substantial investments in AI, which pushes the technological advancements to its limit. With both giants diving deeper into the world of AI, investors are left wondering: which of the stocks offers a better opportunity for growth and making a profit. In this article we will analyse and compare both companies and help determine which might be the smarter investment for those looking to capitalize on the AI revolution.
Why Intel?
To make a good comparison we will first need to analyse both companies. Starting with Intel. Intel is a well-known tech giant and is traditionally known for its CPU’s, which is often referred to as the “brain of a computer”. In recent times the company has been shifting its focus to AI and data-related companies. With its strong connections to the business world and their years of experience Intel has a solid foundation to expand into the AI business.
AI investment
Intel is putting their money where their mouth is, and is investing heavily in AI by buying companies such as Habana Labs. Habana Labs makes AI accelerators, which can expedite the complicated mathematics behind an AI task. Intel is also developing their own AI chip, doing so by acquiring Movidius for example.
Challenges
Despite the efforts to grow rapidly, they have faced some difficulties. There have been some delays in the making of advanced chips. This was a major setback. The tough competition in the market is another hurdle. With companies like AMD and NVIDIA leading the way in this market, there is a lot of innovation pressure. The competition also forces them in a price competition. It is difficult for Intel to invest everything in the innovation of products without raising the prices and thereby giving the competition an advantage.
Why AMD?
AMD has been on a path of growth. The release of the Ryzen CPU’s and the Radeon GPU’s they have left quite an impression. With these computers they have established themselves as a force to be reckoned with, both in the consumer and the enterprise market. AMD’s competitive pricing and their cutting-edge technology have allowed them to become a main player in the tech market.
AI capabilities
AMD have been focusing more and more on AI capabilities. With their AMD Instinct series at the forefront of these efforts, they have been focusing on AI workload, data processing and machine learning tasks. This makes them highly anticipated in the AI space.
Strategic partnerships
Their partnerships with Microsoft Azure and Amazon web services are helping the company with expanding their online presence and the AI capabilities. Because these partners use their GPU’s and CPU’s in their systems, it allows the AI-powered applications to run on AMD hardware, therefore being more available and increasing AMD’s presence in the market.
Comparing Intel and AMD
Market position
In the current market, we can see Intel as more of an established market leader with a strong presence and influence. But we can also see that they are facing some challenges with the delays and the competition.
We can see AMD as more of an upcoming competitor, who is growing rapidly and gaining market share every day. We can also see them as an innovative force, especially with their CPU’s and GPU’s.
Partnerships
Intel has extensive partnerships across different sectors. For instance they have partnerships in automotive and in cloud computing. However their partnerships in the AI sector are still growing and being set up.
AMD has great partnerships with cloud providers, such as Microsoft Azure. We can see that they also have great partnerships with data centres, which play a major role in the AI sector.
Recent performance
If we take a look at the stock price from both companies in the last 6 months we can clearly see that both companies took a bit of a hit. We can also see that they both are slowly coming back to their previous height. With this in mind we can take a look at the performance over the last week, where we see that Intel had a small decrease in stock price at the beginning of the week, but from the 6th of September has being rising quite steadily.
If we take a look at the price of AMD we can see that they also had a small decrease at the beginning of the week and that they are experiencing quite a lot of fluctuations, with the general price slowly rising as well.
Conclusion
In summary we can see that both Intel and AMD have potential in the AI space, but they approach it from different angles. Intel being more focused on stability and overcoming their challenges and with AMD being the fast growing competitor with strong partnerships and a growing influence and presence in date centres.
For investors looking to capitalize on the AI growth, AMD currently offers more momentum and innovation, hereby being an attractive option for investors looking to see their investment bring profit in the near future.
In making a good decision in this matter it is important to know the markets and diversify your portfolio. If an investor has confidence in Intel’s ability to overcome these challenges this can be an excellent choice, but for a short-term investment ADM seems like the superior option.
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