AMD is gaining ground on Intel in server processors as AI inference demand surges, and its cheaper valuation and faster earnings growth make it the more attractive stock pick for capturing this shift.

What happened: AMD's share of server CPU revenue reached a record 46.2% in Q1 2026, up from a much smaller position four years ago when Intel controlled just over 88% of the market. AMD now expects a 70% jump in server CPU revenue in Q2 2026 and sees robust growth continuing through the second half of 2026 and into 2027 as it ramps its next-generation EPYC processors. Meanwhile, Intel remains supply-constrained, with demand continuing to run ahead of supply for Xeon server CPUs.

Why it matters: The computing power needed for AI is shifting from training models to inference—the step where AI systems produce answers on real data. McKinsey forecasts that inference will account for more than half of AI computing capacity in data centers by 2030, and server processors are ideal for this workload because of their lower costs. AMD doubled its server CPU market estimate to $120 billion（約19兆円） by 2030, citing demand from agentic AI and inference applications. AMD's higher average selling price despite lower unit share shows customers are willing to pay more for its processors' performance and cost advantages.

What to watch: AMD stock is up 129% this year versus Intel's 216% rise, making AMD significantly cheaper on a valuation basis. AMD's bottom line is expected to jump by nearly 78% in 2027, well above the 42% jump predicted for Intel. AMD also has another advantage: growing influence in the data center GPU market with lucrative contracts from major cloud providers and AI companies, while Intel has struggled to crack that market.