How Will shares of Intel and AMD Perform as Global PC Sales Decline Alarmingly?

A look at the stocks of AMD and CPU market leader Intel, as the former increases market share rapidly

Global PC Sales Have Decline

The fourth quarter of 2022 saw a 28.5% decline in worldwide PC sales, compared to the same quarter in 2021. There was a 16.2% decline in sales when taken annually. Experts have blamed the market slowdown for this decline, as PC makers gear up to emphasise the sale of software products to keep the cash register ticking. All PC makers, barring Apple, saw a decline in their sales numbers in 2022. But it is not just PC manufacturers who are affected by the declining numbers.

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PC Microprocessor Industry

The global CPU market, too, saw a decline of 4.4% in 2022. Its major player, Intel, saw a massive slide in its market share during the year. Intel is the leading player in the CPU business, which is the most integral component of PCs. Intel owned over 80% of the CPU business globally in 2021. This fell sharply to 71% in 2022. It was AMD who made the most of Intel’s slip-up. They increased their market share from 11.74% to 19.84%.

AMD has significantly increased its product portfolio in recent years. Its 2021 launch, Milan, was only belatedly addressed by Intel with Sapphire Rapids, a product of similar capability. Intel has dropped revenue by 16%, largely due to its delay in launching the latest products and variants, as well as the weakening enterprise spending. 

AMD, on the other hand, is becoming a larger presence in the x86-based CPUs and is increasingly preferred by server companies. Despite the falling industry numbers, AMD registered a 62% growth in its data centre portfolio in 2022.

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Stock Watch - Intel and AMD

Intel stocks started the year at a low of around $26 and are currently trading at close to $30. This is, however, a far cry from the $45 it was trading at in early June last year. Which, in turn, is far off from the highs of $62 seen in April 2021.

AMD share price, however, is a happier story to tell. Its YTD share price growth is over 68%, rising from $64 in early January to $108 at the time of writing. The stock has risen consistently from its $2 price tag 7-8 years ago. With its recent rise, one may expect it to touch its late November 2021 peak of $155.

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Despite its losing market share, Intel continues to dominate and innovate. It is the preferred choice for gamers and controls most of the laptop CPU market, while office-goers may appreciate AMD’s multi-tasking capabilities. While Intel has afforded some market space to AMD in recent times, it is still an industry giant with no imminent concern. 

For stock investors, on the other hand, AMD has undoubtedly been a rewarding investment in comparison to Intel. 

Source:

NEWSLETTER

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