AMD has surpassed Intel in terms of market valuation. Although it was close, AMD surpassed Intel for the first time in the company’s history, with a market worth of $197.75 billion at the end of the market on February 15, compared to Intel’s $197.24 billion. AMD’s unexpected market value increase is the result of its $49 billion acquisition of Xilinx, the largest semiconductor acquisition in history.
AMD is doing well, having surpassed Qualcomm on the market cap list, but Nvidia is also doing well — the company’s $662.38 billion market worth exceeds both AMD and Intel combined.
AMD’s new market capitalization is a far cry from July 2020, when the company’s stock price eclipsed Intel’s for the first time in 15 years, but it only had a market capitalization of $74 billion, compared to Intel’s $260 billion. Back then, Intel’s stock was valued $61.57 compared to AMD’s $61.79, but the situation has changed dramatically, with Intel’s stock currently worth $48.44 compared to AMD’s $121.47.
Following AMD’s acquisition of Xilinx, 248.38 million Xilinx shares were converted into 428 million new AMD shares (a process that is ongoing). Combined with AMD’s existing 1.2 billion shares, this increases the company’s total share count to 1.628 million, giving AMD a market worth of $197.75 billion, just $51 million ahead of Intel. (There may be some variation in the various third-party computations, but all should position AMD ahead of Intel at current stock prices.)
That represents a dramatic turnaround for a business that was on the verge of bankruptcy just six years ago when it first introduced its innovative Zen CPU microarchitecture. Six years of unwavering execution later, AMD has an all-time high proportion of the CPU market, allowing it to sign the largest semiconductor deal in history.
However, we must keep in mind that Intel is by far the larger corporation, accounting for 75% of the overall x86 market share. Intel also earns far more sales and profit per year than AMD and is coming off its sixth consecutive year of record revenue. Not to mention that the company manufactures its own chips and operates a global network of fabs, whereas AMD designs processors but outsources production.
In comparison, AMD’s value indicates that the market is more optimistic about the company’s growth prospects than Intel is. There are numerous reasons to be optimistic: AMD’s recent acquisition of FPGA manufacturer Xilinx brings a diverse portfolio of distinct silicon technologies under the company’s roof, bringing up new, profitable sectors such as automated driving, aerospace, 5G/communications, and IoT, to name a few.
Xilinx is also a thriving company, as seen by its latest 3Q earnings, which included a record quarterly sales of $1 billion, a 26 percent rise year over year. Meanwhile, Intel’s equivalent company, the Programmable Solutions Group (PSG), which arose from the $16.7 billion Altera acquisition, has struggled in recent years as Xilinx has eaten away at its market share. During its most recent earnings call, Intel also reported that its PSG segment has been abnormally impacted by supply constraints throughout 2021, resulting in a $500 million loss in incremental revenue.
