AMD Closes the Gap with Intel: A 50-Year Milestone Thanks to Lisa Su

CNBC AI News – All eyes are on AMD as the chipmaker prepares to release its Q2 earnings on Tuesday. The company is poised to deliver strong results and potentially break new records.

In a landmark moment for the two companies, giants that have both been around for over half a century, AMD is on track to generate approximately $32 billion in revenue this year. This figure, equivalent to around ¥230.7 billion, marks the closest AMD has ever been to Intel in revenue terms.

Back in early May, AMD reported Q1 2025 revenue of $7.4 billion, with a gross margin of 50%. Operating income reached $806 million, and net income was $709 million, translating to diluted earnings per share (EPS) of $0.44.

On a non-GAAP basis, the gross margin stood at 54%, operating income at $1.8 billion, net income at $1.6 billion, and diluted EPS at $0.96.

AMD’s guidance for Q2 projected revenue between $7.1 billion and $7.7 billion. However, the company has consistently surpassed its own estimates in recent quarters, fueled by robust growth. A revenue figure exceeding $8 billion isn’t out of the question.

Rival Intel reported Q2 revenue of $12.9 billion late last month, holding steady year-over-year.

However, Intel’s profitability painted a less rosy picture. GAAP gross margin plummeted from 50.4% in Q1 to 36.5% in Q2, a staggering 20.6 percentage point drop compared to Q2 of the previous year (57.1%). Non-GAAP gross margin also declined, from 53.1% in Q1 to 44.8%, a 15 percentage point decrease year-over-year.

As a result, Intel significantly lowered its full-year adjusted revenue guidance from $76 billion to a range of $65 billion to $68 billion – a reduction of 10.5% to 14.5%, falling approximately 10% below market expectations.

In stark contrast, AMD is expected to generate more than half of Intel’s revenue this year. This is particularly noteworthy considering the difference in their manufacturing capabilities, with AMD relying on external foundries. Traditionally, AMD’s revenue has been just a fraction of Intel’s, ranging from one-tenth to one-fifth.

One area where AMD is certainly excelling is its stock performance. The company’s market capitalization has swelled to over $280 billion, with the stock price climbing around 50% year-to-date, making it one of the best-performing semiconductor stocks. Under CEO Lisa Su’s leadership, AMD has undergone a remarkable transformation over the past decade.

Intel’s market capitalization, by comparison, sits around $80 billion, a fraction of AMD’s. The company faces a challenging road ahead, particularly in gaining traction in the AI market and addressing the financial burden associated with its chip manufacturing operations.