AMD shares rise as analysts flag Intel's market-share losses, citing the chipmaker's ongoing struggles with transition costs.

Advanced Micro Devices (AMD) shares rose 3% on Friday after analysts flagged Intel's ongoing market-share losses to AMD. Analysts from J.P. Morgan and Morgan Stanley noted that Intel's shift to a fabless model won't pay off for 18-24 months, while AMD's Ryzen and EPYC platforms drive sustained momentum in server-CPU shipments. AMD's higher gross margins and leaner expense base paint a more resilient picture. The stock rally underscores a broader semiconductor shift, with smaller players seizing ground as incumbents navigate costly transformations.

Advanced Micro Devices (AMD) shares rose 3% on Friday, following analysts' flagging of Intel's ongoing market-share losses to AMD. The stock rally underscores a broader semiconductor shift, with smaller players seizing ground as incumbents navigate costly transformations.

Analysts from J.P. Morgan and Morgan Stanley noted that Intel's shift toward a more fabless model won't pay off for another 18-24 months, leaving AMD to reinforce its position with Ryzen and EPYC platforms. They see sustained momentum in AMD's server-CPU shipments as cloud providers and enterprises favor its cost-efficient designs. Morgan Stanley pointed to Intel's margin pressures from startup costs and restructuring charges, contrasting AMD's higher gross margins and leaner expense base, which paint a more resilient picture.

The market watchers also highlighted AMD's expanding GPU lineup as a secondary growth driver, with generative AI workloads fueling demand alongside NVIDIA (NVDA). As Intel grapples with transition costs, AMD stands to pick up share in both PC and data center markets. Analysts' price targets generally above current levels underscore the broader semiconductor shift, with smaller players seizing ground as incumbents navigate costly transformations.

Intel's new CEO, Lip-Bu Tan, unveiled a sweeping restructuring plan to eliminate 25,000 jobs globally by 2025, reducing the workforce from 109,000 in late 2024 to 75,000. The move reflects a dramatic shift toward cost discipline after years of financial losses and competitive setbacks in the semiconductor and AI markets. The announcement follows a period of turmoil for Intel, which has seen its stock price drop 33% since 2024 amid mounting losses and strategic challenges.

The restructuring includes layoffs and attrition to cut 15% of the workforce, alongside operational streamlining and the cancellation of costly projects. Construction of new factories in Germany and Poland has been halted, and progress at an Ohio facility has slowed to align with market demand. Manufacturing operations are also shifting from Costa Rica to Asia, with only select engineering roles retained in the region. Tan framed these measures as "hard but necessary decisions" to realign the company’s priorities and restore accountability across all levels of the organization.

Intel’s financial struggles have intensified pressure on management to reverse its fortunes. A Q2 report revealed billions in losses, prompting immediate action to stabilize the balance sheet. The company has ceded ground to rivals such as AMD in traditional computing and NVIDIA in AI, lacking the lucrative cloud or AI divisions that sustain other tech giants.

Tan’s strategy prioritizes short-term cost reductions over high-risk innovation, a pivot that has drawn mixed reactions from investors and analysts. While some argue the cuts are essential to preserve liquidity, critics warn that reduced R&D investment could hinder Intel’s long-term competitiveness.

The announcement has further rattled investor confidence, with shares falling over 9% following the Q2 earnings and layoff announcement. This decline threatens to erase most of Intel’s gains for 2025. The stock’s volatility mirrors broader industry trends, as companies like Microsoft, IBM, and Google have also announced significant workforce reductions to fund AI initiatives and streamline operations.

Tan has defended the cuts as a pragmatic response to economic realities, emphasizing the need to "do more with less" and focus on optimizing existing operations. However, the scale of the layoffs raises concerns about potential erosion of technical expertise and employee morale, particularly in critical research areas. With its foundry business investments paused and strategic overhauls underway, Intel’s path to recovery hinges on executing cost discipline while maintaining innovation momentum in a rapidly evolving sector.

References:
[1] https://www.dailymail.co.uk/yourmoney/article-14941117/intel-layoffs-jobs-crisis-deepens-us.html
[2] https://www.calcalistech.com/ctechnews/article/wmyn05rib
[3] https://finance.yahoo.com/news/intel-shares-plunge-billions-q2-122006114.html
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[5] https://www.tradingview.com/news/invezz:88c789f2f094b:0-intel-shares-slide-as-deeper-losses-major-job-cuts-spook-investors/
[6] https://www.oregonlive.com/silicon-forest/2025/07/intel-says-nearly-a-quarter-of-its-workforce-will-be-gone-by-years-end.html
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[10] https://seekingalpha.com/news/4472165-intel-tumbles-as-it-continues-to-burn-money-lose-market-share-to-amd-analysts