"More Downside to Go" for Intel (INTC) and AMD (AMD) on PC Weakness - Citi

Christopher Danely of Citi maintained a cautious tone on Intel (NASDAQ: INTC) and AMD (NASDAQ: AMD) due to “the downturn in the PC market”, as he kept both chip giants rated “Neutral”.

In his most recent update on the two companies, the analyst cites latest reading showing “July notebook shipments were down 15% MoM” – a data point confirming a weakening macro environment and supporting a negative outlook.

Citi is now “forecasting 7% QoQ growth in 4Q22, implying a 17% YoY decline in notebook shipments” and models the drop in demand “to persist into 2023”, which leads the analyst to believe “there is more downside to Consensus.”

He thus expects “the downturn in the PC market to negatively impact both” and keeps “estimates on both below Consensus”, maintaining a “Neutral” rating on the names.

AMD and Intel have both been notable large-cap underperformers through 2022 – the shares are down 33% and 32% YTD respectively vs a 21% drop in the Nasdaq-100 commonly known as “technology index”, and just a 10% loss for the broader S&P 500 index.

By Vlad Schepkov

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