PC and server shipments are normalizing. Bernstein maintains Intel and AMD's "market perform" rating
Bernstein released a research report stating that the shipment volume in the PC and server markets is normalizing, with a quarter-on-quarter increase of 7% in the third quarter, but a year-on-year decline of about 2%. Analyst Stacy Rasgon gave Intel and AMD a "market perform" rating, with target prices of $25 and $150, respectively. AMD's market share in both the laptop and desktop segments has increased, reaching 19.2% and 28.7%, respectively. Rasgon pointed out that Intel did not announce many incentives in the third quarter, indicating its efforts to normalize channel inventory
According to Zhitong Finance APP, Bernstein published a research report assessing the PC and server markets, stating that third-quarter shipments "basically met" seasonal trends, with a quarter-on-quarter increase of 7%.
Analyst Stacy Rasgon wrote in a report to clients: "Total PC shipments in the third quarter decreased by about 2% year-on-year, while the second quarter saw an increase of about 1%. The CPU channel now shows signs of normalization, with overall CPU shipments only about 2% higher than PCs, down from about 9% observed in the second quarter, which is basically in line with expectations."
Rasgon noted that laptop CPU shipments were about 4% higher than PCs and 10% higher than the second quarter, showing a "significant" decline but still slightly above expectations. Desktop CPU shipments were insufficient, about 4% lower than expected.
Rasgon added: "Therefore, we believe that the PC channel has now begun to show signs of normalization."
Currently, the analyst gives Intel (INTC.US) and AMD (AMD.US) a "market perform" rating, with target prices of $25 and $150, respectively.
The report pointed out that AMD's market share in the laptop segment increased by about 2 percentage points in the third quarter to 19.2%, while its desktop market share rose by about 6 percentage points to 28.7%. The company's revenue share also increased, ending the quarter at about 27.3%, a quarter-on-quarter increase of about 8 percentage points.
Rasgon wrote: "It remains to be seen how much of AMD's substantial share growth in the third quarter is simply Intel reorganizing its product channels rather than a more sustainable result," as Intel has been "incentivizing" sales in recent quarters. However, Rasgon believes that Intel did not announce many incentives in the third quarter, indicating that the company is working to normalize its channel inventory.
Regarding the server CPU market, AMD's unit share growth has "slightly slowed," although the company's revenue share has increased.
Intel continues to struggle in the AI accelerator market, with Gaudi AI product shipments this year expected to be less than $500 million, while AMD has raised its target to over $5 billion. Rasgon added: "How this number will change looking ahead to 2025 remains the biggest question facing the stock, especially considering that their roadmap is still far behind that of their larger competitors."