Intel, AMD in focus as Bernstein weighs in on PC, server markets
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Robert Way
Intel (NASDAQ:INTC) and AMD (NASDAQ:AMD) were in the spotlight on Monday as Bernstein weighed in on the PC and server markets and said the third-quarter was “in-line(ish)” with seasonality, with shipments seeing 7% sequential growth.
“Overall PC shipments fell by ~2% YoY in Q3, vs the ~1% growth seen in Q2,” analyst Stacy Rasgon wrote in a note to clients. “The CPU channel is now showing signs of normalization, with overall PC CPU shipments only ~2% above PCs, below the ~9% observed in Q2 and sitting right around parity.”
Rasgon, who has Market Perform ratings and price targets of $25 and $150 on Intel and AMD, noted notebook CPU shipments were roughly 4% above PCs and 10% above the second-quarter, down “meaningfully,” though still slightly above parity. Desktop CPUs undershipped and are now roughly 4% below parity.
“Hence, we believe the PC channel has now started to show signs of normalization,” Rasgon added.
AMD gained roughly two points of notebook unit share in the third quarter to 19.2%, while it gained roughly six points in desktop units to 28.7%. Revenue share for the Dr. Lisa Su-led company was also up, ending the quarter at roughly 27.3%, up roughly eight points sequentially.
“It remains to be seen how much of AMD’s sizeable share gains in Q3 might have been the result of Intel simply flushing the channel vs more sustainable,” Rasgon wrote, as Intel has been “incentivizing” sales in recent quarters. However, the Pat Gelsinger-led Intel did not report as much incentivizing in the third-quarter, suggesting the company is working to get its channel inventory back in line, Rasgon posited.
Regarding the server CPU market, AMD’s unit share gains have “slowed a bit,” even as the company’s revenue share has ticked higher.
Intel is still struggling in the AI accelerator market, as it will ship less than $500M in Gaudi AI units this year, while AMD raised its target to more than $5B. “Looking ahead into 2025 the question of where this number can go remains the biggest question for the stock, especially given their roadmap remains well behind their larger competitor,” Rasgon added.