Better WallStreetBets Semiconductor Stock: Intel or Advanced Micro Devices?
High demand for semiconductors from several industries, such as electric vehicles (EVs) and consumer electronics, and rising investments to address the global chip shortage position the semiconductor industry for solid growth. So, we think prominent players in this space, Intel (INTC) and Advanced Micro Devices (NASDAQ:AMD), should benefit. But which of these stocks is a better buy now? Read more to find out.Intel Corporation (NASDAQ:INTC) in Santa Clara, Calif., designs, manufactures, and sells essential technologies for the cloud, smart, and connected devices. Its segments include Data Center Group; Internet of Things Group; Mobileye (F:0ME); and Non-Volatile Memory Solutions Group. In comparison, Advanced Micro Devices, Inc (AMD), which is also headquartered in Santa Clara, Calif., operates in two segments—Computing and Graphics; and Enterprise, Embedded, and Semi-Custom. Its products include x86 microprocessors, an accelerated processing unit, chipsets, discrete and integrated graphics processing units, data center and professional GPUs, and development services.
Since last year, the rising demand for semiconductor chips from several industries has created a huge supply/demand imbalance. The resulting increase in prices has been favorable for the semiconductor industry. While huge investments are helping semiconductor manufacturers increase production, the supply shortage may not end anytime soon.
The increasing need for advanced devices that feature a wide range of innovative technologies should keep the demand for semiconductors much higher than their supply for the foreseeable future. According to a Fortune Business Insights report, the global semiconductor market is projected to grow at an 8.6% CAGR between 2021 – 2028. Therefore, both INTC and AMD should benefit. Interestingly, these two stocks are among the top 15 most mentioned stocks on subreddit r/WallStreetBets. AMD has gained 64.3% in price over the past year, while INTC has returned 11.5%. Also, AMD’s 48.7% gains year-to-date are significantly higher than INTC’s 2.2% returns. Furthermore, AMD is the clear winner with 75.2% gains versus INTC’s negative returns in terms of the past six months’ performance.
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