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AMD stock climbed for a ninth straight trading day on Friday. The shares rose nearly 3% in late trading.

The winning streak represents AMD’s longest in several years. It comes as Intel faces mounting challenges.

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Intel CEO Lip-Bu Tan said his company’s turnaround will take several years. He made the comment during Intel’s fourth quarter earnings call.

The message hit Intel’s stock hard. But it lifted sentiment around AMD.

Intel reported better-than-expected December quarter earnings. Yet the company gave a disappointing revenue outlook for the current quarter.

Supply Constraints Create Opening

Intel’s supply problems are creating opportunities for AMD. The company said it cannot meet strong processor demand because of supply limits.

Intel CFO David Zinsner told Barron’s that processor demand was “really strong.” But the company worked through prior inventory and still faces supply constraints.

Tan said Intel is improving its chip-manufacturing yields. However, the company hasn’t reached industry-leading levels yet.

Zinsner spoke with multiple hyperscaler customers on Thursday. They indicated strong demand would continue for several years.

Both Intel and AMD use x86 chip architecture for CPU processors. These chips serve as the main computing brains for PCs and servers.

If Intel can’t manufacture enough chips to meet demand, AMD stands to benefit. AMD’s business accounts for the rest of the CPU market.

JPMorgan analyst Harlan Sur pointed to the server market. He said Intel faces risk of losing more CPU share in this area.

Server CPU demand is rising. AI-related workloads are driving part of this growth.

Intel’s wafer supply limits prevent it from fully serving this demand. This creates an opening for AMD to win market share.

Manufacturing Advantage

AMD uses Taiwan Semiconductor Manufacturing Company for chip production. This gives AMD a potential advantage.

TSMC may have more capacity to make processors going forward. The company raised its annual capital expenditure forecast last week to build more capacity.

Sur highlighted AMD’s strong server CPU lineup. The company’s steady product rollout continues to resonate with customers while Intel works through supply and capacity issues.

AMD stock has gained 23% this month. Investors are growing more optimistic about the chipmaker’s business prospects.

The stock rally reflects investor belief that Intel’s challenges will persist. This gives AMD more time to push into Intel’s core markets.

Wall Street maintains a Strong Buy consensus on AMD. The rating is based on 24 Buy and eight Hold ratings from the past three months.

Analysts set an average price target of $284.93 for AMD stock. This represents potential upside of 8.61% from current levels.

AMD is scheduled to report fourth-quarter results on Tuesday, February 4.

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