AMD Shares Gain Momentum as Intel Stumbles

Advanced Micro Devices (AMD) equity continues its impressive ascent, marking a ninth consecutive trading session in positive territory. On Friday alone, the stock climbed 2.35% to close at $259.68. This sustained rally appears to be fueled not just by AMD's own strengths, but by significant challenges emerging at its chief rival, Intel.

Market attention now turns to AMD's own financial results, scheduled for release on February 3rd, covering the fourth quarter of 2025. Consensus estimates project revenue of $9.65 billion, which would represent a 26% year-over-year increase. Adjusted earnings per share are expected to come in at $1.32, a rise of 21.1%.

Analysts will scrutinize the performance of the data center segment and the outlook for AI accelerators. In Q3 2025, AMD's data center revenue reached $4.3 billion, growing 22%. For the full year 2025, the company had previously guided for approximately $5 billion in AI-related revenue.

Intel's Forecast Triggers Market Shift

The immediate catalyst for AMD's recent surge stems from Intel's latest financial update. After markets closed on Thursday, Intel reported Q4 2025 results that surpassed revenue expectations—$13.7 billion versus estimates of $13.4 billion—and beat on adjusted EPS, posting $0.15 against a forecast of $0.08.

However, the company's guidance for Q1 2026 delivered a shock to investors. Intel projected revenue between $11.7 and $12.7 billion, notably below the consensus estimate of $12.6 billion. Perhaps more startling was the forecast for adjusted earnings per share of approximately $0.00, where analysts had anticipated $0.05. This outlook precipitated a steep sell-off, sending Intel shares down over 15% on Friday.

Should investors sell immediately? Or is it worth buying AMD?

Intel's CFO, David Zinsner, pointed to specific operational headwinds. He stated that "available supply in the first quarter will be at its lowest level before improving in the second quarter," citing depleted buffer inventories and industry-wide supply constraints. He further noted rising costs for DRAM, NAND, and substrates, warning these factors "could limit our revenue opportunities this year."

A Favorable Landscape for AMD

Intel's supply challenges emerge during a period of massive projected growth in artificial intelligence infrastructure spending. Hyperscaler investments in AI are anticipated to exceed $600 billion in 2026, a 36% increase from 2025. This environment positions AMD to capture demand that Intel may be unable to meet, particularly with its EPYC server CPUs and Instinct AI accelerators.

This dynamic has prompted several analyst firms to revise their stance on AMD. In early January, KeyBanc upgraded the stock to "Overweight" with a $270 price target. The firm's rationale includes sold-out server CPU capacity for 2026 and potential price increases of 10-15% in the first quarter. KeyBanc models at least 50% growth in AMD's server CPU business for the year and projects AI-related revenue of $14 to $15 billion for 2026.

The contrasting fortunes of the two chipmakers highlight a shifting competitive landscape. As one navigates significant supply and cost pressures, the other is poised to potentially gain market share in the critical and expanding data center and AI markets.