Intel Corporation (Nasdaq: INTC) is losing PC and server microprocessor market share to smaller competitors such as Advanced Micro Devices (AMD), and Wall Street is taking notice. On Monday, Barclays downgraded INTC stock from “overweight” to “equal-weight” and said investors shouldn’t expect meaningful improvement from Intel until at least 2019.
Barclays analyst Blayne Curtis says the PC and server markets are booming, but Intel’s technology has fallen behind at a critical time.
“INTC continues to believe that it can retain a performance advantage even with a process node disadvantage, but it has provided little evidence to support this, creating an overhang well into 2019,” Curtis says.
In Intel’s most recent earnings call, management said the company’s next-generation 10-nanometer processors will be available by the holiday season of 2019 after initially calling for production to begin in late 2018. Curtis says it will be difficult for Intel to convince investors that its current Cooper Lake 14nm processors can outperform the AMD Epyc2 7nm processors.
Curtis has also been disappointed with the rumored list of CEO candidates to replace Brian Krzanich, who stepped down in June following reports of an inappropriate past relationship with another Intel employee. Curtis says the CEO transition provides Intel with a unique opportunity to bring in a disruptive external influence, but Intel seems to be considering mostly internal candidates.
“Net net, all is not lost for Intel, but we move to the sidelines and would revisit early next year when the CEO, [fiscal 2019] guidance and competitive plans are better understood,” Curtis says.
In the meantime, Bank of America analyst Vivek Arya says AMD is gaining on Intel. Mercury data on microprocessor unit sales in the second quarter shows AMD gained share from Intel across all PC and server device types.
“AMD unit growth (flat) outperformed INTC, driving 30 bps of share gains for AMD to 12 percent – marking its highest level since 2012,” Arya says.
Arya says healthy demand is boosting all semiconductor stocks, but AMD is the better stock pick than Intel at the moment.
“[AMD] continues…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
