NEW YORK (CNN/Money) - As it gets set to report first-quarter results Tuesday after the bell, Intel finds itself in an unusual position: industry laggard.

The Philadelphia Semiconductor Index is up slightly for the year but shares of Intel, which dominates the microprocessor market, have fallen nearly 15 percent.

Investors were disappointed by Intel's mid-quarter update in March. At the time, the company said its first-quarter sales would come in at the low-end of its guidance and cited some concerns about inventory problems in the notebook-computer market.

Still, analysts expect Intel (INTC: Research, Estimates) to report a 21 percent increase in quarterly sales, to $8.17 billion. Earnings are expected to nearly double, to 27 cents a share.

Meanwhile, Intel's much smaller rival, Advanced Micro Devices (AMD: Research, Estimates), is expected to report results on Wednesday and has become a semiconductor stud. AMD's stock is up more than 14 percent year-to-date.

AMD is expected to post a profit of 3 cents a share, which would mark its second consecutive quarterly profit after nine losses in a row. Quarterly sales are expected to surge 63 percent, to $1.17 billion.

Analysts say AMD has been able to turn around its fortunes and gain market share from Intel thanks to its 64-bit Opteron and Athlon chips for servers and desktops, which have more processing power than Intel's 32-bit Pentium family of chips.

"AMD is still a small company versus Intel but the fact that they are growing is testimony to the improvement of their product lines," said Richard Whittington, an analyst with Caris & Co.

Still, Intel is finally prepared to fight back. It is scheduled to roll out a 64-bit version of the Pentium for servers in the second quarter. Intel already has a high-end 64-bit chip for servers known as the Itanium but it has not been a huge success.

With that in mind, several analysts think the pessimism surrounding Intel is overdone and that its stock represents the better buy.

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"AMD is doing a lot of things well with 64-bit leadership," said Cody Acree, an analyst with Legg Mason. "But I'm not sure that this is sustainable."

In addition, analysts said that inventory problems in the notebook market appear to be subsiding. "It seems like notebook inventory has been depleted and order flow from Dell and HP is returning," said Tai Ngyuen, an analyst with Susquehanna Financial Group.

That and a pickup in corporate spending has led to increasing hope that Intel will guide Wall Street to expect higher second-quarter sales, said Patrick Ho, an analyst with Moors & Cabot. Intel has traditionally offered guidance for sales but not earnings.

That would be a big boost for Intel since the second quarter is typically is the weakest of the year for most chip companies.

"If Intel guides up at all, it's a huge positive," Ho said.

Intel made some waves Monday with the announcement of a new line of chips designed specifically for cell phones and other wireless devices. The wireless device market should remain a lucrative one for chip companies but so far Intel has yet to find major success in this area.

Texas Instruments (TXN: Research, Estimates), which will report its first-quarter results Wednesday, continues to be the leader in this area.

Analysts expect TI to report first-quarter earnings of 21 cents a share, up from 7 cents a year ago. Sales are forecast at $2.9 billion, a 32 percent increase from the first quarter of 2003 and 4 percent improvement from the fourth quarter.

In fact, TI raised its first-quarter sales guidance in March. And analysts think the company will avoid the seasonal semi slump in the second quarter thanks to its exposure to the cell phone market and other hot areas of consumer electronics, such as plasma TVs. Wall Street is predicting second quarter sales of $3.06 billion.

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Still, shares of TI dipped last week following Nokia's surprising sales and earnings warning. Nokia is a large TI customer.

But Ho said that it looks like Nokia simply lost market share in the quarter and that other TI customers probably picked up the slack. RF Micro Devices (RFMD: Research, Estimates), another wireless chip manufacturer and big Nokia supplier, reaffirmed its first quarter's outlook a day after Nokia warned.

TI's stock has held up much better than Intel this year but it has not done as well as AMD. Shares are flat for the year. With that in mind, Acree said that AMD's days as a chip stock leader could be numbered.

"With semi stocks, if you're not buying when there are mistakes then you're chasing momentum and that's historically proven to be a difficult strategy. Investors should take advantage of controversy," Acree said.

Analysts quoted in this story do not own shares of the companies mentioned and their firms have no investment banking relationships with any of the companies.