Citi thinks that both AMD and Intel will have more bad news until 2023 as PC demand gets worse.
Citi analysts looked at the data about notebook sales in September and gave their thoughts. Citi thought that growth would be 23% MoM, but shipments only went up by 12% MoM. Analysts say this is a big miss because “continued inventory digestion and demand deterioration” are to blame.
The September data show that notebook shipment volume went up by only 3% in Q3. This is a lot less than Citi’s prediction of a 7% increase from Q2 to Q3. Because of this, Citi analysts lowered Q4 notebook shipment growth from up 6% QoQ to down 9% QoQ, which is “well below historical seasonality of up 2% QoQ.”
In a client note, they said, “We now expect a 22% YoY decline in notebook shipments, down from our previous estimate of an 18% YoY decline.”
The analysts think there will be more declines through 2023, so they kept their Neutral ratings on both Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD). They did this because “the downturn in the PC market will hurt both, and our estimates remain below the consensus,” which means that the analysts don’t think the companies will do well.
Related: Intel is the latest Western technology company to halt operations in Russia.
“We think the consensus estimates are too optimistic because PC sales are going down. “Both of our estimates for C22 and C23 are below what most people think,” they said.
Citi’s estimates for AMD’s EPS in 2023 are up to 45% lower than the average, and Intel’s are 25% lower.
After the U.S. made it harder for China to get high-end AI chips, shares of both AMD and Intel fell before the market opened on Monday.
