Competitive pressures from Advanced Micro Devices Inc. and others prompted a rare bearish call Monday for Intel Corp.

“Intel’s INTC, +0.60% process technology leadership is diminished if not evaporated,” wrote Northland Capital Markets analyst Gus Richard, who downgraded Intel’s stock to underperform from market perform. He expects AMD’s AMD, +2.83% 7-nanometer server CPU and 14-nanometer notebook CPU to pose significant competition for Intel.

Intel shares were down 3.4% Monday afternoon, while AMD stock was up 4.7% to a new 11-year high.

Process technology refers to the silicon manufacturing process, explained Ryan Shrout, principal analyst at Shrout Research. Companies try to decrease the size of their chips, in terms of nanometers, in hopes that the new chips will be cheaper and more powerful. Moves downward within a particular foundry show improvement, while nanometer differences between different foundries are generally tougher to compare.

Opinion: Intel makes it a three-way race with AMD and Nvidia on graphics chips

As such, Northland’s Richard thinks that Intel’s 10-nanometer process is “roughly” equivalent to the 7-nanometer process of competitor Taiwan Semiconductor Manufacturing Co Ltd. TSM, -0.14% , which counts AMD as a customer. The problem for Intel is that the company’s 10-nanometer technology has been prone to delays, and management said recently that it won’t be in production until some unspecified time in 2019. That could give AMD and others an opening.

“We expect that AMD will sample a 7-nanometer server CPU in 2H:18 and move into production in 2019 likely in lockstep or slightly ahead of Intel,” Richard wrote. “We also expect AMD’s 14nm notebook CPU to ramp in 2H:18, diminishing Intel lead in this category and driving AMD share gains.”

According to Shrout, Intel’s process technology has been considered “two full steps ahead of the competitors” for at least the past decade, and it has been about that long since AMD was last competitive in CPUs.

Micron earnings: China probe poses wild card for highflying stock

“Intel can no longer go into production or sales knowing that their process technology is better than everyone else’s,” Shrout said. “Now they have to stand up on the design of the product and the performance of products.”

The CEO of chipmaker AMD says this is the future of big data

As for Northland’s Richard, his caution on Intel goes beyond concerns about process technology. For one, he argued, more specialized chips like graphics processing units, or GPUs, and application-specific integrated circuits , or ASICs, “are more critical to improving performance in data centers than CPUs.” In the short term, he projects a slowdown in servers for the third quarter.

In a statement, an Intel spokesman said the company will “continue our history of CPU leadership.”

“While we are prepared for a more competitive environment as we move through 2018, we’ve already factored that into our financial forecast and we’re in a great position to compete,” the company said in an email. “We remain very confident in our products, our roadmap and our competitive position.”

Richard becomes one of just three analysts out of 39 tracked by FactSet who rate Intel stock at the equivalent of a sell, while 26 rate Intel a buy and 10 label it a hold.