Chip stocks bad news AMD, Intel admits: global PC demand worse than expected | Anue Juheng – US Stocks

AMD and Intel have acknowledged that demand for personal computers (PC) is fading and that the situation is worse than their gloomy outlook.

After meeting with Intel (INTC-US) and AMD (AMD-US) executives last week, Bernstein analyst Stacy Rasgon released a research note on Monday (19th) that focused on the decline of the PC market.

The processors for AMD and Intel personal computers and servers use the x86 chip architecture.

Intel Chief Financial Officer David Zinsner said that compared to the company’s annual PC market forecast provided in July, it was a further 10% decline from 2021. He did not offer a revised forecast.

The data center market has softened due to weaker sales in China and a tougher macro environment, Zinsner said.

The analyst also spoke with Dan McNamara, head of AMD’s enterprise server division, who revealed that “the current PC environment is chaotic and the outlook for customers is lower than expected.” In contrast, the current PC market has declined by around 15%.

Rasgon has an “underperform” rating on Intel with a $30 price target, while AMD has an “outperform” rating with a $135 price target.

Intel edged up 0.68% on Monday to close at $29.44 per share; AMD edged up 0.34% to close at $76.77 per share.

Intel in April expected the PC market to rebound in the second half of the year. But over the next few months, business conditions worsened. According to IDC data, global PC shipments fell 15% in the first quarter of June, and then Intel and AMD revised their full-year 2022 PC market forecasts when they announced their second quarter earnings.

Now AMD and Intel are saying that the overall PC market is doing worse than their revised forecasts, which I’m afraid doesn’t bode well for their business.

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