Bernstein's latest report assesses the PC and server markets, indicating that third-quarter shipments were largely in line with seasonal trends, showing a sequential growth of 7%. Analyst Stacy Rasgon noted that overall PC shipments declined by about 2% year-over-year, compared to a 1% increase in the previous quarter. The CPU channel is showing signs of normalization, with overall CPU shipments only about 2% higher than PC shipments, down from approximately 9% in the second quarter, aligning with expectations.
Notebook CPU shipments exceeded PC shipments by roughly 4%, a 10% increase from the second quarter, representing a significant decline but still slightly above expectations. Desktop CPU shipments fell short, approximately 4% below expectations. Rasgon commented that the PC channel is now beginning to normalize.
The analyst currently rates Intel (INTC) and AMD (AMD, Financial) as "market perform," with target prices of $25 and $150, respectively. AMD saw its notebook market share rise by about 2 percentage points to 19.2% in the third quarter, while its desktop market share increased by about 6 percentage points to 28.7%. The company's revenue share also rose to approximately 27.3%, an 8 percentage point increase quarter-over-quarter.
Rasgon questions how much of AMD's significant market share gain in the third quarter is due to Intel simply clearing its product channels rather than a more sustainable outcome. Intel has been incentivizing sales in recent quarters but did not announce many incentives in the third quarter, indicating efforts to normalize channel inventory.
In the server CPU market, AMD's unit share growth has slightly slowed, although its revenue share has increased. Intel continues to struggle in the AI accelerator market, with Gaudi AI product shipments expected to be less than $500 million this year, while AMD has set its target above $5 billion. Rasgon notes that the biggest issue for Intel remains how this figure will change by 2025, given their roadmap lags behind larger competitors.
