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AMD and Intel Say PC Demand Is ‘Getting Worse.’ That’s Bad News for Chip Stocks.

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Intel headquarters in Santa Clara, Calif.

David Paul Morris/Bloomberg

So much for the vaunted second-half comeback. The two major computer-chip companies are now acknowledging PC demand is fading beyond their already downbeat outlooks.

On Monday, Bernstein analyst Stacy Rasgon published a report after meeting with senior executives at




) and

Advanced Micro Devices



) last week. The main takeaway is the PC market is “getting worse.”

AMD and Intel use the x86 chip architecture in making the processors that act as the main computing brains for PCs and servers.

For Intel, the company’s Chief Financial Officer David Zinsner told Rasgon the PC market has “deteriorated further” than the “down 10% [versus 2021]” annual PC-market guidance the company gave in July. The executive did not offer a revised outlook. Zinsner said the data-center market has weakened on the back of softer sales in China and the more difficult macro environment.

The analyst also met with AMD’s Dan McNamara, the head of the chip maker’s business-server unit. The AMD executive revealed the current PC environment is “messy,” and the outlook from customers is weaker than expected. AMD said the PC market is trending worse than the company’s prior PC market outlook of down “midteens” percent versus the prior year.

Rasgon has an Underperform rating on Intel stock with a $30 price target. He rates AMD stock at Outperform with a $135 price target.

In Monday trading, Intel stock fell 0.8% to $29.00, while AMD stock traded down 0.3% to $76.28.

In April, Intel projected a rebound for the PC market for the second half of this year. But business conditions have only gotten worse in the ensuing months. Worldwide shipments for personal computers fell 15% in the June quarter from a year earlier, according to IDC. Then Intel and AMD reduced their full-year 2022 PC market forecasts when they reported their second-quarter earnings.

But now both companies say the overall PC market is faring even worse than their lowered expectations. That doesn’t bode well for their results going forward.

Write to Tae Kim at

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