After Intel (NASDAQ: INTC) said that its CEO would resign, the company also pre-announced preliminary quarterly earnings that were positive. The news sent both Intel and competitor Advanced Micro Devices (NASDAQ: AMD) shares down on June 21. With the search for a new Intel CEO, what are the implications for AMD?
Under CEO Brian Krzanich, Intel stumbled on a number of product releases. Its focus shifted away from the PC business and toward new segments. Mobileye and Altera are long term growth drivers for Intel but not a good enough excuse for the company’s lack of focus on the PC market. In that time, AMD refreshed its CPU line twice, with Ryzen 1 and 2.
Intel had only the expensive Intel i7 processor for the HEDT market that did not have a favorable price to performance compared to AMD’s Threadripper. In the server space, where profits matter more than the notebook and desktop market, AMD launched a scalable server solution with EPYC. The memory architecture gives EPYC customers more flexibility in adapting to future computing demands.
New leadership will give INTC shareholders hope but it is in uphill battle. AMD’s assault on the notebook and server markets will lead to an erosion in market share for Intel. Intel still has time to fight of AMD. The company pre-announced second-quarter results. It now expects revenue topping $16.9 billion, up from a previous $16.29-billion estimate. EPS of up to $0.99 is better than the $0.85 consensus.
Takeaway
Any drop in Intel or AMD stock creates an entry point for both investments. AMD still has a technical advantage as Intel seeks new leadership.
Tech Insider
