After the two chip makers released their quarterly earnings this week, analysts said that Intel is caught in product delays and management uncertainty, AMD is quickly gaining an advantage in competition with Intel. This may indicate the two companies The competition will change dramatically. For a long time, this competition has been regarded as a strong defender facing a brave but often unlucky challenger.
After Intel released its quarterly earnings later on Thursday, the company's share price fell 8.6% on the second day, closing at $47.68, setting the lowest closing price of the stock since the end of February, also hit the stock. The biggest single-day decline since January 15, 2016. According to Dow Jones data, on January 15, 2016, Intel's share price fell 9.1%.
From the quarterly earnings report released this time, although quarterly results are higher than Wall Street expectations, Intel also raised its performance expectations, but its data center revenue growth did not meet analysts' average expectations, and Intel seems to postpone the launch of new products. time.
On the other hand, AMD's share price rose 3.2% on Friday, closing at $18.94, setting the highest price since January 2007. Local time late Wednesday, the company announced the best in seven years. Quarterly results report. AMD's share price rose nearly 15% this week, and in sharp contrast, Intel's share price fell 8.2% this week.
Over the past year, Intel's share price has risen by 3.3%, while AMD's share price has risen by more than 84%. AMD's performance is far better than the broader market index, as the Dow Jones Industrial Average rose 3% during the same period, and the S&P 500 index rose 5.4%. The Nasdaq Composite Index, which has gathered technology stocks, rose 12.1%, and the Philadelphia Semiconductor Index rose 9.5%.
One of the biggest catalysts for the two companies' share price changes is that more and more people believe that AMD's 7-nanometer chip manufacturing process is currently at a level comparable to Intel's 10nm process, even better than Intel's 10nm process.
'7nm' and '10nm' refer to the size of the transistor that a chip manufacturer can manufacture on a computer chip. The general rule is that the smaller the transistor, the faster and more efficient the chip will be.
Investment bank Bernstein analyst Stacy Rasgon recently downgraded Intel's stock rating. He said that Intel is not optimistic about the upgrade of 10 nanometer products on Thursday, the company's expectations 'meaning its gross profit margin plummeted And earnings per share are lower than Wall Street forecasts'.
Lagoon said in a research report, 'It is very clear now that 10 nanometer server chips will not appear until some time in 2020. This delay is not surprising for us, but we believe some investors I have been looking forward to it. This will naturally lead people to AMD. The company will launch a 7-nanometer Rome product in 2019 to compete with Intel's Cascade Lake (14 nanometers). Therefore, in this manufacturing process competition, The two companies will no longer remain at the same level, and AMD is clearly in the lead.
Investment bank Susquehanna Financial analyst Christopher Rolland gave Intel stock a 'bullish' rating, raising Intel's stock target price from $58 to $64. Roland said the delay of Intel's 10nm product makes AMD's 7nm PC The chip is competitive and may even change the lead in the server market. 'Roland gives AMD a 'neutral' rating.
Investment bank Cowen analyst Matthew Ramsay said that Intel faces a lot of competition and manufacturing problems, and the CEO is new, which gives AMD the advantage. Ramsey gives Intel stocks' and the broader market 3. The “market perform” rating gives AMD a 'out of the market' rating.
Ramsey said, 'We are rapidly approaching a window. AMD will be in the same manufacturing position as Intel in 2019. In fact, AMD has an advantage in the data center market because 7nm EPYC and Intel's 10nm Xeon CPU Than, it’s been a whole year. '
Investment bank MKM analyst Ruben Roy said he believes Intel's positive side is greater than negative. Roy gives Intel stock a 'buy' rating and gives ADM a 'neutral' rating.
Roy said, 'Although the bears may still believe that the 10nm launch is slower than expected, and the changes in Intel's leadership bring uncertainty, we still expect Intel to maintain an important leading position in the manufacturing industry. We believe this Will continue to enhance the company's strong earnings performance. '
When Roy talked about AMD, he said, 'Although we continue to appreciate AMD's execution on its product roadmap (Rome is expected to be launched in 2019), we still believe that before its market share growth gains greater visibility, The valuation of the company's stock at the current level is appropriate.'
Mark Lipacis, an analyst at investment bank Jefferies, said Intel has a 'good' quarterly performance, but its business model may 'show some signs of pressure'. That is, second in 2018. The quarterly capital expenditure intensity is close to the highest level in history, and it is expected that the company's 10 nanometer products will be shipped during the holiday season of 2019. 'We believe that AMD will gain a dominant position in 2019, which is the first time in history. ' Lipaki Sis gave Intel stocks 'poor performance' and gave AMD a 'buy' rating.
Lipackis also said, 'AMD is regaining market share in the PC chip this year, we believe the company will regain share in the server chip market next year', and Nvidia 'is gaining market share in the data center processor. ' Nvidia is expected to be 8 Announced quarterly earnings on the 16th.
Investment bank Mizuho analyst Vijay Rakesh, gave a 'buy' rating to both Intel and AMD stocks, and raised AMD stock target price from $17 to $20, while maintaining Intel's stock target price At $60. Rakesh largely avoided getting involved in the competition debate between Intel and AMD. He pointed out that AMD has made 'modest progress' in improving gross margin and accelerated the Vega chip business and server for data centers. Chip growth. For Intel, Lakash said that the company's stable sales of PC products and growth in the data center made Intel 'buy' in the 'regression' rating.
According to FactSet, after AMD’s quarterly earnings report, 14 of the 33 analysts who studied AMD raised the company’s stock target price, and the average target price target increased to $16.10, while the average target price before the earnings announcement was $14.88; 13 analysts give AMD a 'buy' or 'overweight' rating, 14 give a 'hold' rating, and 6 give a 'sell' or 'reduce' rating.
Among the 42 analysts who studied Intel, after Intel announced its quarterly earnings report, 11 people lowered the target price for Intel stocks, but 6 people raised the target price of the stock. Now the average target price of these stocks given by Intel analysts is $57.89, which is lower than the average target price of $59.17 before the quarterly earnings announcement. According to FactSet, 24 analysts gave Intel stocks a 'buy' or 'overweight' rating, and 14 analysts gave 'hold' Rating, 4 analysts give a 'sale' or 'reduce' rating.