Intel (NASDAQ:INTC) and advanced micro-devices (NASDAQ:AMD) are set to release their second-quarter financial results next week, but Intel reportedly said the results would come in lower than previously expected due to the loss of Huawei’s export license. Bernstein Société Générale Group.
“For Intel, we are slightly downgrading the numbers, consistent with the company’s negative guidance earlier in the quarter following the loss of Huawei’s export license,” Bernstein analysts Stacy Rasgon, Akhilesh Kumawat and Alrick Shaw wrote in a note to investors on Friday.
Bernstein lowered Intel’s Q2 earnings per share estimates to $0.08 from $0.10 and its revenue to $12.74B from $13B. They also lowered their Q3 estimates to $0.30 from $0.33 and to $14.4B from $14.7B.
“Stocks still seem to be in no man’s land to us,” Rasgon said. “PCs did look a little better in Q2, but CPUs seem to have been significantly overloaded over the last few quarters, which could mess things up.”
“Anecdotally, server CPUs may be poised for some cyclical recovery in the second half of the year, but share losses remain a significant concern and spending shifts toward GPUs remain an issue,” he added.
Bernstein rates Intel a Market Perform and a $35 price target.
While Bernstein isn’t lowering AMD’s second-quarter estimates, the company has slightly lowered its third-quarter estimates. It’s now modeling a decline in third-quarter revenue from $6.6 billion to $6.5 billion, and earnings per share estimates have been lowered from $0.94 to $0.87.
“We’ve been a little worried about AMD’s core business performance for the past year or two, and things have probably bottomed out at this point,” Rasgon notes. “But the AI story will likely continue to be the only thing that matters to investors, and while we think the company will resume AI guidance, we’d be surprised to see an increase from current expectations, which are already above expectations, and recent news about potential HBM issues and possible order cancellations seems unsupportive.”
Bernstein rates AMD a Market Perform with a price target of $140.
AMD is scheduled to report second-quarter results after markets close on July 30. The consensus estimate is for earnings of $0.68 per share on revenue of $5.72 billion.
Intel releases its results two days later, after the market closes. Estimates are for earnings per share of $0.10 on revenue of $12.98 billion.
Both stocks have been down recently, with AMD drops by 10% over the last five trading sessions and Intel shedding 5%.
