Intel CEO Lip-Bu Tan says the company can fill only half of customer demand for server CPUs, a shortage that points toward higher chip prices across the market. AMD looks positioned to gain the most, having already taken significant server CPU share from Intel while posting faster data-center growth.
Intel can't keep up with server CPU demand
Intel CEO Lip-Bu Tan recently told a conference that the company can meet only 50% of customer demand for server CPUs, a shortfall spanning the x86 server market Intel shares with AMD. Growth in agentic AI and inference workloads, which lean on CPUs to break tasks into steps, call applications into action, and monitor security, is driving the demand.
Tom's Hardware reports that Intel is poised to implement a 10% price hike in March 2027, after already raising prices a couple of times this year, and that AMD is expected to follow suit. Intel's revenue rose 25% year over year to $16.1 billion in Q2, with its data center and AI segment jumping 59%. The company also swung to non-GAAP earnings per share of $0.42, from a loss of $0.10 a year earlier.
AMD keeps taking server CPU share from Intel
Mercury Research shows AMD's server CPU market share climbed to 34.5% in Q2, up from 27.3% a year earlier. UBS analysts say the superior core count and multithreading capability of AMD's chips suit them to agentic AI workloads, and AMD's data center revenue jumped 107% year over year in Q2.
AMD is also ramping capacity in Taiwan with foundry partner TSMC. CEO Lisa Su expects to increase CPU capacity rapidly every quarter this year, with more capacity planned for 2027. AMD believes it can grow server revenue more than 80% in the second half of 2026, then over 70% in 2027.
Earnings growth and valuation favor AMD
Analysts expect AMD's earnings to jump 82% this year and 105% in 2027, while Intel's earnings growth is projected to slow from 262% this year to 35% in 2027. AMD's forward earnings multiple of 36 sits well below Intel's 56, even as AMD grows faster in the same server CPU market.
Source: The Motley Fool
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