AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC) are both slated to report third-quarter results over the next several days and though Bank of America believes the pair has “limited” upside for the rest of the year, the investment firm said investor focus is likely to shift to 2024.
Other notable events include Apple’s (AAPL) upcoming product event, which may see the launch of new Macs, as well the recently updated restrictions on China and the impact to Intel’s Habani Gaudi accelerators.
“We see limited valuation headroom with stock trading ~20x/16x CY24/25 PE (versus 13x historical), with enhanced geopolitical tensions seen as a risk,” the analysts wrote. They have an underperform rating and $35 price target on Intel.
A consensus of analysts expect Intel to earn 22 cents per share on $13.6B in revenue.
Intel (INTC) shares fell nearly 5% on Wednesday amid a broader rout in technology stocks.
“We expect AMD to report in line but likely guide Q4 in line to modestly below consensus as it faces headwinds in its embedded (Xilinx) and console (seasonal, product maturity) sales,” the analysts wrote. “However, all eyes will likely be on clues to MI300 AI accelerator ramp for .”
They added that AMD is in the “attractive ‘compute’ neighborhood, but still have a neutral rating on the stock given that it is trading at 25 times estimated earnings for 2024, in-line or above where Nvidia is trading, despite it having faster growth and a lead in artificial intelligence.
A consensus of analysts expect AMD to earn 68 cents per share on $5.69B in revenue.