Intel and AMD will be reporting on the quarter’s results through the end this month. Industry analysts are already creating their forecasts. According to Bernstein officials, they misunderstoodly thought AMD’s consumer-processor business was more resilient that Intel’s. The first company had to sell the most recent processors at a discount and the second was forced into it by its own policy.
The market value for AMD shares was reduced by Bernstein experts from $95 to $80. This is due to continued negative trends in PC markets and the incorrect assumption that AMD’s business would be less affected than Intel’s in such circumstances. The new AMD PC components were introduced a few months back. According to the researchers, these are being sold at substantial discounts. Given the increase in costs for all market participants, this could result in a decrease of the company’s profit margin over the medium term. Bernstein representatives consider Bernstein’s forecasts, which mention the possibility for growth in profit margins over the second half year, too optimistic. AMD shares dropped in price 2.5% following publication of such a forecast.
Analysts agree that nothing can stop AMD’s success with its server processors. This means that even if AMD performs poorly in the consumer sector this will be partially offset by revenue growth in AMD’s server segment. KeyBanc Capital Markets experts even classified AMD shares as one of those securities that will outperform the market in the current macroeconomic situation due to the ability to “make a soft landing” due to success in the server direction. The forecasters classified NVIDIA as an issuer, while Qualcomm was classified as an issuer whose business would be more resilient to problems in the consumer market.
Bernstein expressed concern about Intel’s prospects and lamented its “self-destructive behaviour” in discussing the company’s future. The processor giant continues to cut prices and abuse the volume it delivers to the market. Experts believe that Intel is not required to limit product shipment volumes to acceptable levels despite the current crisis of overproduction. Bernstein said that Intel management could allow the situation to unfold, not trying to improve the financial performance in the months ahead.