AMD Loses Market Value, While Intel Gains
AMD's stock fell over 7% in premarket trading, erasing nearly $10 billion in market value. Meanwhile, Intel's shares rose by nearly 2% last week due to a more optimistic PC market outlook.
Analysts Question AMD's Competitive Edge
Bernstein analyst Stacy Rasgon commented that even if Intel didn't gain market share this quarter, it's unlikely they lost any either. She added that the competitive environment in 2024 could become tougher for AMD, depending on whether Intel's roadmap holds up.
PC Market Struggles and Slowing Data Center Spending
The PC market has declined for several quarters after a surge in demand during the pandemic. Additionally, data center spending has slowed due to a worsening economic outlook. AMD's smaller and more efficient data center chips, which helped the company gain market share from Intel last year, missed sales estimates for PC and data center chips in Q1.
AMD's Q2 Sales Forecast Falls Below Expectations
AMD's sales forecast for the current quarter was also below market expectations. However, the company remained optimistic that the chip market would begin to recover in the second half of 2023.
Impact of Consumer vs Business PC Market
Gartner (NYSE: IT) analyst Mikako Kitagawa pointed out that AMD's results were more vulnerable to the PC slump than Intel's, as most AMD-based PC customers were consumers, while Intel held a significant share in the business PC segment.
AI Buzz and China Recovery Offer Hope for AMD
Some analysts noted that the growing interest in artificial intelligence and a recovery in China were positive signs that could help AMD. Brokerage TD Cowen stated that despite AMD's vulnerability to macro spending fluctuations, the company's share gains earned through its roadmap execution and product performance would sustain through 1H23 before giving way to strong momentum in 2H23.
