Dell CEO Kevin Rollins said it will begin using AMD's dual-core Opteron chips to power some their high-end servers. The AMD chips are expected to make it into the new Dell machines by the end of this year. Up until now, the company has relied exclusively on Intel processors.

Analysts see the move as a way for Dell to compete more effectively in the highly competitive server market, where HP and IBM have been been gaining market share.

Wall Street reacted by driving up AMD's shares by 13 percent, while Intel's shares fell 4.9 percent. Dell's stock rose slightly -- 3.4 percent. The news came amid the company's fiscal report, which showed Dell's first quarter profits dropping by 18 percent.

"We welcome Dell, and Dell customers, to the world of AMD64," said Marty Seyer, AMD senior vice president, Commercial Business. "Dell is a customer-focused company and we're pleased to see that they are listening to their customers and providing them the choice of innovative AMD products. We look forward to working closely with Dell in bringing the benefits of AMD leadership in performance-per-watt solutions to Dell customers.