Advanced Micro Devices and Intel are fiercely competing in the chip sector. Last year — for the first time — AMD surpassed its rivals in market capitalization and continues to hold the lead, even though Intel held a historic lead in processors. Both reported earnings recently, with Intel reporting its biggest quarterly loss in the company’s history. AMD, on the other hand, saw its revenue drop by 9% as PC chip sales plummeted. However, both stocks performed well this year. AMD surged about 26% year-to-date, while Intel jumped nearly 18% over the same period. Looking ahead, does one stock have an edge over the other? CNBC Pro examines what Wall Street analysts are saying about their rivals. AMD For Morgan Stanley, AMD is primed for the second half of the year. “Investors are highly skeptical that data centers will recover in two hours, but there is visible prospect of AMD capturing share of all cloud customers this year,” the bank said in a May 3 note. We were also optimistic about AMD’s new MI300 graphics chip launching later this year. The bank believes it will be a relatively small earnings driver next year, but with AMD looking to compete with Nvidia in artificial intelligence, the new chip is “very important to the narrative and the long-term narrative”.Morgan “Overall, this is a mixed quarter, but given the selling, I’m positive about the story,” said a Stanley analyst after AMD’s stock fell on lower-than-expected guidance. The businesses that investors have been eyeing, namely microprocessors and graphics processors for PCs and data centers, are poised to grow well from here, with strong product-related ramps in all areas and two hours Nevertheless, Morgan Stanley, which has an overweight rating on the stock, lowered its price target from $102 to $97, suggesting a roughly 19% gain. In its May 3 memo, Bank of America downgraded AMD to neutral, which he rated as underperforming, higher than Intel. But BofA “continues to like AMD’s consistent execution and broad product cycle in the attractive computing/AI market.” said it was due to a weak outlook for the second quarter. “AMD’s share price may come under pressure in the short-term, but some recovery is expected as the company outlines its AI vision and growth potential for its proprietary Converged AI (MI300) product. Analysts covering AMD said the stock could rise by an average of 22%, according to FactSet. Intel Morgan Stanley believes Intel’s earnings have “bottomed out,” and margins are expected to recover in the second half of the year. Still, it noted that the company faces a year of “very limited growth” after “minimal” cash generation, significant market share challenges and an inventory snapback lost momentum. , Intel got a comparable rating with a target price of $31. Uplift from current levels is minimal. BofA does not expect Intel to see a “meaningful” year-over-year recovery until 2024, adding that his PC outlook in the near future will be worsened by Intel’s price hikes. Increased spending in China should help rebound demand, BofA said, but the long-running inventory problem will disproportionately affect Intel compared to AMD, which outsources manufacturing. Giving it an underperforming rating and a price target of $25 meant an 18% downside. According to FactSet, analysts covering Intel estimate the average potential upside for the stock to be just 1.3%. — CNBC’s Michael Bloom contributed to this report.
