For the First Time in History, AMD's Market Cap Exceeds Intel's.

For the First Time in History, AMD's Market Cap Exceeds Intel's.

AMD has overtaken Intel in terms of market capitalisation. AMD has eclipsed Intel for the first time in the company's history, with a market worth of $197.75 billion compared to Intel's $197.24 billion after the end of the market on February 15. The dramatic increase in AMD's market capitalization follows its $49 billion acquisition of Xilinx, the biggest semiconductor transaction in history.

Following AMD's acquisition of Xilinx, 248.38 million Xilinx shares were converted into 428 million new AMD shares. When combined with AMD's current 1.2 billion shares, the company's total share count is 1.628 million, giving it a market worth of $197.75 billion, just $51 million ahead of Intel. (There may be some differences in the third-party computations, but at present stock prices, all should put AMD ahead of Intel.)

That's a dramatic turnaround for a firm that was on the verge of bankruptcy just six years ago when it introduced its groundbreaking Zen CPU microarchitecture. After six years of unwavering execution, AMD today has an all-time high proportion of the CPU market, allowing it to sign the world's largest semiconductor transaction.

However, we must keep in mind that Intel is by far the larger corporation, with 75% of the entire x86 market share. Intel also earns far more sales and profit every year than AMD, having just completed its sixth year of record revenue. Not to mention the fact that the company manufactures its own chips and operates a global network of fabs, whereas AMD designs chips but outsources production.

When seen in perspective, AMD's value indicates that the market is more optimistic about the company's growth prospects than Intel. There are several reasons to be optimistic: AMD's recent acquisition of FPGA manufacturer Xilinx puts a vast portfolio of distinctive silicon technologies under the company's roof, bringing up new, profitable sectors such as autonomous driving, aerospace, 5G/communications, and IoT, to name a few.

Xilinx is also a thriving firm, as seen by its latest 3Q results, which featured a record quarterly sales of $1 billion, up 26% year over year. Meanwhile, Intel's equivalent subsidiary, the Programmable Solutions Group (PSG), which arose from the $16.7 billion Altera acquisition, has struggled mightily in recent years as Xilinx has cut into its market share. During Intel's most recent earnings call, the company also reported that its PSG segment has been adversely affected by supply shortages in 2021, resulting in a $500 million revenue loss.

Meanwhile, AMD is making a strong start with Xilinx, predicting that its first 'blended' products, which include both AMD and Xilinx logic, would be available in 2023.

AMD is doing well, having surpassed Qualcomm on the market cap list, but Nvidia is also doing well, with a market valuation of $662.38 billion, surpassing both AMD and Intel together.

AMD's current market worth is a long cry from July 2020, when the company's stock price overtook Intel's for the first time in 15 years, but it was just $74 billion, compared to Intel's $260 billion. Intel's stock was valued $61.57 compared to AMD's $61.79 at the time, but the situation has changed dramatically since then, with Intel's stock currently at $48.44 compared to AMD's $121.47.

Intel isn't happy with seeing its market share dwindle, and it's showing indications of making a comeback in the client sector. Intel CEO Pat Gelsinger has also staked the company's future on a new vision that involves developing chips for other companies as part of its IDM 2.0 plan, and has increased R&D investment to record highs. In a few days, during Intel's investor event on February 17, we'll learn more about their efforts.