Intel vs AMD: Who Has the Upper Hand?

Intel is currently in the limelight as investors and analysts weigh the company’s moves to check the swiftly rising dominance of rival AMD. On Aug. 17, Intel price target was slashed by BofA Securities. The bank’s analyst Vivek Arya said in a report that Intel is yet to sort out its operating model. The confusions around the company’s business strategy will offset the company’s influence in Cloud, AI, 5G and autonomous vehicles, Arya said. The analyst maintained a neutral rating but cut his price target for the stock to $55 from $62.

Intel’s Strategic Problems

Arya also said that the company’s indecisiveness for its 2021, 2022 product lines might prompt its loyal customers to move to AMD products. The analyst also thinks that Intel’s increasing reliance on third-party foundries for chip production is a negative factor that will damage the company in the future.

However, not all analysts agree with the notion that Intel will lose its dominance to AMD.

Intel is too big to lose the battle with AMD?

Intel is a big company when compared to AMD, with massive free cash flows and a strong exposure to various growth markets, including Cloud, AI and self-driving cars. The company recently announced its Tiger Lake processor line that analysts think would beat AMD’s latest chips. Tiger Lake benchmarks suggest that it can beat AMD’s chips with just four cores. Tiger Lake will also benefit from Intel’s Xe graphics architecture for high-end gaming.

Intel has a free cash flow of $17 billion, as of 2019, while AMD’s FCF stands at just $0.2 billion for the same period. A strong free cash flow gives Intel ample room to invest in game-changing products that will surpass AMD.