Intel at risk of a big price war with AMD, Barclays cites while downgrading Intel to sell

AMD is becoming more and more competitive in 2018 as it was being predicted in late 2017, but some issues like Intel shortage and lack of 7nm plan is contributing to the epic rise of AMD. Intel shares are down 0.9 percent Monday. Curtis lowered his price target for Intel shares to $38 from $53, representing 20 percent downside to Friday’s close.

CNBC is reporting that Barclays just decided to lower its rating to underweight from equal weight for Intel shares, predicting the chipmaker will generate earnings per share below expectations next year. “Intel faces a costly battle ahead to retain share as competitive threat from AMD heats up, along with near-term slowing of end markets,” analyst Blayne Curtis says.

According to Barclays new insight, Intel will either lose market share or be forced to cut its prices to compete with its resurgent competitor AMD.

“Intel faces a costly battle ahead to retain share as competitive threat from AMD heats up, along with near-term slowing of end markets,” analyst Blayne Curtis said in a note to clients Monday. Intel’s financial model “sensitivity shows material downside to EPS, declining FCF [free cash flow] a real possibility.”

Curtis said Intel faces a “no-win” situation of either cutting prices or losing market share to AMD.

“The market is already giving AMD credit for significant share gains, but Intel is not going to let that share go without a fight with pricing the only real lever to pull,” he said.

Curtis reduced his estimate for Intel’s 2019 earnings per share to $4.21 from $4.30 versus the Wall Street consensus of $4.27.

On Friday, Intel’s interim CEO, Bob Swan, said the company has enough supply to meet its 2018 full-year revenue outlook, but admitted chip supply was “tight” especially in the entry level part of the market.

What are the new and upcoming bullish signs for AMD finishing 2018 entering 2019.

  1. Great Leadership – Dr. Lisa Su and team
  2. Architectural Design Brilliance
  3. Intel CPU shortage opportunity
  4. Chiplets/Modularity/Infinity Fabric for Moore Performance
  5. Modularity+Infinity Fabric for Less Engineering Cost
  6. Modularity/Infinity Fabric Enables Unique Products
  7. Zhongshan Subor gaming console in Chinese market
  8. Microsoft Xbox
  9. Sony Playstation
  10. AMDs new generation of laptops and desktop APUs
  11. Tesla has discarded Nvidia GPUs for its new autonomous driving hardware. It is rumored that the new hardware is using AMD hardware with custom Tesla designed elements
  12. TAM++ :  AMD is shipping products this year across a larger TAM than any of it’s competitors.
  13. Semiconductor design is like driving a semi-trailer
  14. 7nm Rome Epyc “Monster” : 32/64 cores/threads per chip
  15. 7nm Vega X2 “Monster” : 7nm Vega has Infinity Fabric and can be run with MULTIPLE Vega chiplets in one GPU.
  16. Security: AMD did not as much nightmares on the CPU flaws in 2018
  17. NEW Markets AMD has/will enter 2017-2019: mid and high end desktop CPU market, mid and high end laptop market, Entire workstation market, Entire professional desktop market, Entire professional laptop market, high end GPU market, Entire datacenter server CPU market low middle and high end, AI market, Embedded Market
  18. Institutional Demand: Only 692 institutions own AMD vs 2789 who own INTC

 

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Technology, finance, AMD, intel, intel stocks, amd stocks, amd price, amd bullish, amd cpu, amd gpu, amd skyrocket, stocks, amd shares, amd predictions

 

Mohsen Daemi
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