AMD vs. MRVL vs. INTC: Which Chip Stock Is Wall Street's Best Pick?
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Advanced Micro Devices (NASDAQ:AMD) Stock
Advanced Micro Devices stock has risen about 19% over the past month, bringing the year-to-date rise to 14%. Upbeat first-quarter results, strategic acquisitions to support AMD's AI ambitions, and new graphics processing units (GPUs), mainly MI350 and MI400 series, unveiled at the Advancing AI event, have driven the stock higher and addressed concerns about the company lagging behind rival Nvidia (NVDA) in the AI race.
Ahead of AMD's Q2 results scheduled on August 5, several analysts are confident about strong growth in the company's data center GPU (graphics processing unit) business. Currently, analysts expect AMD to report earnings per share (EPS) of $0.49, reflecting a 29% year-over-year decline. Revenue is estimated to grow by 27% to $7.41 billion.
Is AMD Stock a Buy or Sell?
Recently, Melius Research analyst Ben Reitzes upgraded AMD stock to Buy from Hold and raised the price target to $175 from $110. The 4-star analyst discussed several favorable aspects, including stronger-than-anticipated demand for AMD's MI300 and MI350 series GPUs as well as early traction for the upcoming MI400 platform.
Reitzes also noted the demand for Advanced Micro Devices' products in AI inferencing and moderating risks in the PC segment. He also highlighted robust deal momentum, including those with Amazon (AMZN), ChatGPT-maker OpenAI, Meta Platforms (META), and Saudi Arabia's HUMAIN. Aside from AI GPUs, Reitzes expects continued share gains in high-margin server CPUs.
With 24 Buys and 10 Holds, Wall Street has a Moderate Buy consensus rating on Advanced Micro Devices stock. The average AMD stock price target of $133.62 indicates 3% downside risk from current levels.
Marvell Technology (NASDAQ:MRVL) Stock
Marvell develops application-specific integrated circuits (ASICs) that are used as AI accelerators by customers in their data centers and cloud infrastructure. These AI accelerators (or XPUs) are preferred by some customers as they can be cost-effective alternatives to Nvidia's GPUs, which are designed for more generic workloads.
Marvell stock has risen 5.3% over the past month but is still down about 35% year-to-date. A guidance miss earlier this year dragged down the stock along with macro woes and tariff pressures. However, the company's market-beating Q1 FY25 results and second-quarter guidance improved investor sentiment, reflecting strength in the demand for the company's custom chips amid the AI boom.
The company is optimistic about the road ahead, bolstered by the demand for custom AI chips. Management expects to gain from robust spending by hyperscalers, sovereign data center projects, and opportunities in emerging markets.
What Is the Forecast for MRVL Stock?
Recently, Piper Sandler analyst Harsh Kumar reiterated a Buy rating on Marvell stock with a price target of $85, saying 'Growth to be Driven by XPU Proliferation.' Following meetings with management, the 5-star analyst noted that the company's growth strategy for its XPUs is on track and is set to ramp significantly in the near to mid-term timeframe.
In Kumar's view, MRVL is one of only two companies that hold the necessary intellectual property to service the leading-edge XPU market for hyperscaler customers. He continues to believe that this market will remain resilient as hyperscaler spend remains strong.
Turning to Wall Street, Marvell stock scores a Strong Buy consensus rating on TipRanks, based on 27 Buys and four Holds. The average of $91.39 indicates 27% upside potential from current levels.
Intel Corporation (NASDAQ:INTC) Stock
Intel stock has risen 18% so far this year, as investors are hopeful of a turnaround under the leadership of the company's new CEO Lip-Bu Tan. In fact, INTC stock surged 7.2% on July 8, as investors welcomed the news of new tax credits and additional layoffs aimed at streamlining operations. The chipmaker has been struggling in recent years, as a lack of innovation, strategic missteps, and delays in product launches have led to a continued loss of share in the CPU market to AMD.
CEO Tan is attempting to revive the business by enhancing efficiency, reducing costs, divesting non-core assets, and introducing new products. While investor sentiment has improved, Wall Street remains cautious on INTC stock, as several analysts await further signs of improvement at the company. Moreover, analysts are concerned that Intel may miss the opportunity to capitalize on AI-driven demand for advanced chips. Additionally, chip restrictions and tariff woes could hinder the company's ongoing restructuring efforts.
Intel is scheduled to announce its second-quarter earnings on July 24. Wall Street expects Intel's Q2 revenue to decline by more than 7% to about $12 billion, while EPS is estimated to remain flat on a year-over-year basis at $0.02.
Is Intel a Buy, Sell, or Hold?
Recently, Truist Securities analyst William Stein reiterated a Hold rating on Intel stock with a price target of $21. The 5-star analyst stated that Intel's Foundry Direct Connect conference provided a glimpse of CEO Tan's strategy, which he believes is similar to that of his predecessor. He noted that building the company's manufacturing and foundry capabilities remains a major focus. Stein added that Tan's recent hires suggest that Intel's longer-term aspirations may resemble Broadcom's (AVGO) ASIC business.
Stein is concerned that tariff-related pull-ins may impact near-term demand. Meanwhile, the analyst noted that INTC's restructuring and layoffs continue to get attention. He believes that Intel's aim is to reduce the number of management layers to simplify the company's organizational complexity. Stein expects Intel's Q2 earnings to be the next significant catalyst. He added that Q2 expectations are muted. The analyst sees earnings as more likely a positive than a negative catalyst, though his 'conviction on this matter is low.'
Overall, Wall Street has a Hold consensus rating on Intel stock based on 26 Holds, four Sells, and one Buy recommendation. At $21.44, the average INTC stock price target implies a possible downside of 9.1% from current levels.
See more INTC analyst ratings
Conclusion
Wall Street is sidelined on Intel stock and cautiously optimistic on AMD stock. Meanwhile, analysts are bullish on the growth prospects of Marvell stock, backed by AI tailwinds. They see higher upside potential in MRVL stock than in the other two chip stocks. Most analysts view the pullback in Marvell stock as an attractive buying opportunity to capitalize on the company's long-term growth story.
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