By Angela Palumbo
Personal computer demand hasn't fully recovered -- and one Citi analyst thinks that's not good for Intel and Advanced Micro Devices.
In midday trading Thursday, AMD stock was flat at $171.01 and shares of Intel were down 0.4% to $23.37.
Citi's Christopher Danely, in a research note, said weak demand for PCs is "not great for Intel and AMD."
Citi rates AMD as a Buy with a $210 price target and Intel as a Hold with a $25 price target.
"Intel derives roughly 35% of revenue from notebook CPUs and AMD has roughly 16% of sales from notebook CPUs," Danely wrote.
Wall Street will learn more about how PC demand has impacted both companies when they report earnings later this month. AMD posts third-quarter results on Oct. 29. Intel's third-quarter financials come on Oct. 31.
PC demand has been a worry for investors since the worst of the pandemic. At the height of the Covid-19 outbreak, PC demand peaked because of workers and students stuck at home.
Then, in the past couple of years, sticky inflation and higher interest rates have made computers more expensive to buy. Consequently, demand has dropped.
Worldwide shipments of traditional PCs dipped 2.4% year over year to 68.8 million units in this year's third quarter, according report from IDC Research.
"While we expect AI to reach ubiquity at some point at the end of this decade, the ramp up towards mass market will take longer than expected, well into 2026," Linn Huang, IDC's research vice president of devices and displayswrote.
"The next year-and-change will be largely about developing software, use cases, and target audiences for this AI-enabled hardware."
Write to Angela Palumbo at angela.palumbo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
October 10, 2024 11:53 ET (15:53 GMT)
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