Citi Sees More Downside for Both AMD and Intel Into 2023 as PC Demand Worsens

By Senad Karaahmetovic

Citi analysts weighed in on the data for notebook shipments in September. Although shipments rose 12% MoM, Citi expected growth to be 23% MoM. For the analysts, this is a big miss, which is the result of “continued inventory digestion and demand deterioration.”

The September data means that notebook shipments were up 3% in Q3, significantly weaker than Citi’s estimate that was calling for 7% QoQ growth. As a result, Citi analysts lowered Q4 notebook shipment growth from up 6% QoQ to down 9% QoQ, which is “well below historical seasonality of up 2% QoQ.”

“We now expect a 22% YoY decline in notebook shipments, down from previous forecast of 18% YoY decline,” they said in a client note.

The analysts expect to see more downside into 2023, hence they reiterated Neutral ratings on both Intel (NASDAQ:) and Advanced Micro Devices (NASDAQ:) on expectations that “the downturn in the PC market to negatively impact both and our estimates remain below the consensus.”

“We believe there is more downside to the consensus estimates given collapsing PC demand. Our C22 and C23 estimates on both are below the consensus,” they added.

Citi’s 2023 EPS projections for AMD are as much as 45% below consensus and 25% below for Intel.

Shares of both AMD and Intel are trading lower in pre-open Monday trading after the U.S. expanded its ban on the export of high-end AI chips to China.

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