AMD, Intel ship more CPUs in Q2 despite overfill: Bernstein
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Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD) shipped more CPUs during the second quarter, despite signs of an overfilled PC CPU supply, according to Bernstein Société Générale Group.
The PC market has a whole demonstrated growth, increasing 9% from the quarter prior, reaching just above pre-COVID levels, Bernstein noted. It ticked up 1% year over year for the first quarter, compared to a slide of 2% during the first quarter.
“But the CPU channel continued to show signs of fill, with overall PC CPU shipments approximately 9% above PCs, below the approximately 18% observed in Q1 but still notably above parity,” said Bernstein analysts, led by Stacy Rasgon, in a Tuesday note.
AMD added about 1% of notebook unit share during the second quarter to 20.3%, while Intel’s desktop share increased about 1% to 77%.
“Intel’s guidance suggested an overfilled CPU channel was impacting their 2H outlook, though AMD suggested above-seasonal growth in PC CPUs,” Rasgon said. “We note Intel has been pulling forward sales for quite a few quarters, with recent ‘incentivized sales’ levels approaching the elevated levels we saw exiting 2022, and hence are paying for it now.”
Intel’s second quarter revenue related to customer incentives totaled about $1.3B, or 10% of total revenue.
“Intel’s launch of Sierra Forest and Granite Rapids, and AMD’s Turin launch, will be closely watched in that context as Intel hopes to reverse the share trend, and AMD strives to maintain it,” Rasgon added.
Bernstein rates both Intel and AMD at Market Perform with a target price of $25 and $150, respectively.
Intel and AMD both inched up 1% during pre-market trading on Tuesday.
Seeking Alpha analyst Juxtaposed Ideas pointed out in a recent report that both Intel and AMD were underperforming in the generative AI and x86 CPU races.
“With INTC also reporting and guiding poor Data Center/AI related revenues in FQ2’24 and FQ3’24, it is no secret that both companies have been unable to capitalize on the ongoing AI boom, underscoring why Nvidia (NVDA) has been estimated to command the leading share of up to 90% in the AI GPU chip market/80% of the entire data center AI chip market,” they noted.