Bernstein Analyst Warns on AMD, Intel Amid AI Stock Frenzy
Top Bernstein analyst Stacy Rasgon has recently provided insights into the semiconductor sector, focusing on Advanced Micro Devices (AMD) and Intel (INTC). Ahead of their earnings reports, Rasgon maintained a Market-Perform rating for both companies, with price targets set at $200 for AMD and $21 for Intel.
Market Outlook for AMD and Intel
Rasgon highlighted positive signs in the PC and server markets. However, he pointed out significant challenges that both companies will face into 2026. Despite the promising short-term improvements, long-term hurdles remain.
Intel’s Ongoing Challenges
Intel’s recent quarter was described as “Monty Python–like.” The company raised approximately $16 billion from various sources, including SoftBank and the U.S. government. This move, while bolstering its balance sheet, introduced risks such as share dilution and reliance on non-recurring deals.
Rasgon emphasized that Intel continues to struggle with market share losses in both client and server chips. He raised concerns that numerous analysts are projecting revenues that do not account for Intel’s divestiture of Altera, which could impact quarterly revenue by around $1.6 billion. Rasgon also pointed out that profit margin expectations are overly optimistic; analysts forecast margins close to 80%, while Intel’s guidance ranges between 40% to 60%.
AMD’s Strategic Moves
Conversely, AMD’s partnership with OpenAI has generated considerable excitement, boosting the stock by 34% since last quarter and nearly doubling year-to-date. Rasgon noted that this deal was crucial for AMD’s relevance in the rapidly evolving AI market, although it required sacrificing about 10% of its equity.
He slightly adjusted his projections for AMD, predicting third-quarter revenue at $8.94 billion and earnings per share (EPS) of $1.22. This estimate exceeds Wall Street’s forecasts of $8.74 billion and $1.17 EPS, respectively. For 2026, he forecasts $39.1 billion in revenue and $5.27 EPS, which is lower than some market expectations.
Analyzing the Stock Potential
According to the TipRanks Stock Comparison Tool, analysts are divided on these chipmakers. AMD has a “Strong Buy” consensus, suggesting a 4% potential upside in the next year. In contrast, Intel carries a “Hold” rating, with an estimated 24% downside risk during the same timeframe.
- AMD Price Target: $200
- Intel Price Target: $21
- Intel Q3 revenue potential: -$1.6 billion due to Altera divestiture
- AMD Q3 revenue estimates: $8.94 billion
In summary, while AMD shows stronger momentum in the AI space, significant uncertainties linger for both companies as they approach their upcoming earnings reports.
