Harsh Chauhan, The Motley Fool
5 min read
Intel (NASDAQ: INTC) has been on a stellar run in 2026, with shares of the chip giant rising 222% as of this writing. The stock’s stunning rally has been fueled by its improving financial results and growing influence in the artificial intelligence (AI) chip market.
However, rival chipmaker Advanced Micro Devices (NASDAQ: AMD) poses a major threat to Intel’s stock market fortunes. The latest numbers revealed by market research firm Mercury Research (via Tom’s Hardware) make it clear that Intel continues to lose ground to AMD in the lucrative server central processing unit (CPU) market.
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Let’s see why AMD could derail the impressive rally in Intel stock.
AMD’s rapidly improving market share is bad news for Intel
According to Mercury Research, Intel’s share of server CPUs fell to 66.8% in the first quarter of 2026, down from 72.8% in the year-ago period. Intel’s weakening position in this market can be attributed to the popularity of AMD’s Epyc server CPUs, which are in terrific demand from hyperscalers and enterprises.
As noted by AMD CEO Lisa Su on the company’s recent earnings call:
In Server, we delivered our fourth consecutive quarter of record server CPU revenue. Revenue increased more than 50% year-over-year with sales to both Cloud and Enterprise customers each growing more than 50%. Share gains accelerated year-over-year, reflecting the ramp of fifth-gen EPYC Turin CPUs and continued strength of fourth-gen EPYC processors across a wide range of workloads.
Su added that cloud service providers have increased the deployment of Epyc server processors to support AI workloads. Importantly, the company is confident of gaining more market share in the server CPU space, driven by the addition of new customers “across financial services, healthcare, industrial and digital infrastructure companies.”
What’s more, AMD claims that its next-generation server CPUs could further strengthen its competitive advantage over Intel by delivering higher performance at lower cost. Another important point worth noting is that customers are willing to pay a premium for AMD’s server CPUs. The company’s revenue share of the server CPU market was 46.2% in Q1, even though its unit share was a third.
So, it appears that the performance and cost advantages AMD claims over rivals are translating into strong pricing power. At the same time, Intel is struggling to produce enough chips to meet customer demand. CEO Lip-Bu Tan made it clear on the company’s April earnings call that “demand continues to run ahead of supply for all our businesses, especially for Xeon server CPUs.”
