Advanced Micro Devices already has been taking market share from Intel in chips for PCs and servers. And now AMD stands to gain more ground thanks to Intel's latest misfortunes, analysts say. Intel stock crashed Friday while AMD stock was little changed.
Late Thursday, Intel badly missed estimates for the second quarter and with its guidance for the third quarter. The chipmaker also announced a $10 billion cost-reduction plan that includes 15,000 job cuts. Plus, Intel is suspending its dividend starting in the fourth quarter.
Melius Research analyst Ben Reitzes said Intel's problems "could be great news for AMD."
"We've seen an acceleration in share gains of late at AMD and heard about issues with Intel products," Reitzes said in a client note Friday. "These things are hard to stop once they get going."
Given product reliability and execution issues at Intel, computer makers might be reluctant to trust Intel with their business, he said.
"Put yourself in the shoes of (Dell Chief Executive) Michael Dell for instance — you would think he's making a call to get closer to AMD CEO Dr. Lisa Su," Reitzes said. The same goes for HP CEO Enrique Lores, he said.
Intel Stock Tumbles While AMD Stock Holds Steady
Intel stock received a flood of ratings downgrades and price-target cuts on Wall Street after its bleak report.
Reitzes maintained his hold rating on Intel stock and slashed his price target to 25 from 37. He rates AMD stock as buy with a price target of 205.
On the stock market today, Intel stock cratered 26.1% to close at 21.48. Meanwhile, AMD stock dipped a faction to 132.50.
Elsewhere on Wall Street, Rosenblatt Securities analyst Hans Mosesmann reiterated his sell rating on Intel stock with a price target of 17. He rates AMD stock as buy with a price target of 250.
"We anticipate that the company (Intel) will continue to lose share to AMD as its manufacturing roadmap is tepid compared to that of the leading-edge player," Mosesmann said in a client note.
Intel Issues 'Approaching The Existential'
Bernstein analyst Stacy Rasgon was particularly grim about Intel's prospects.
"The company's issues are now approaching the existential," he said in a client note. "In other circumstances we believe we would now be having 'going concern' conversations with clients."
Rasgon kept his market perform rating on Intel stock but cut his price target to 25 from 35. He rates AMD stock as market perform with a price target of 150.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
