It is the age-old story of an underdog turning into the pack alpha. Intel, beset by a growing number of headwinds, is now increasingly ceding its market share to the one-time runt of the microchip world, AMD, as per the data leveraged by Bank of America (BofA) in a new investment note.
$AMD / $ARM GAINING PC / CPU SHARE OVER INTEL $INTC, SAYS BANK OF AMERICA:
"We review Q3 CPU trends based on Mercury Research data. Overall, Q3 data suggest a story of two tales, with AMD showcasing clear share gains over INTC.
For PCs, units increased just +1% QoQ (+1% YoY)…
— Stock Talk (@stocktalkweekly) November 11, 2024
To wit, BofA recently leveraged Mercury Research's data to try to glean CPU trends for the third quarter of 2024. The Wall Street titan found that Intel undershipped in the third quarter, with its PC shipments declining by around 3 percent quarter-on-quarter (QoQ) vs. the market demand, which actually grew by 7.5 percent QoQ, based on IDC's Q3 PC sell-through units estimate. This allowed AMD to increase its market share by a whopping 15 percent QoQ.
BofA partially explains this discrepancy by noting that "AMD has a greater mix of western consumer and desktop mix vs. INTC more China/enterprise and notebook mix which remain weak."
On the positive side, Intel and AMD both managed to increase their ASPs by around 5 percent QoQ, aided by the pricier AI PC products.
For servers, BofA found that AMD's Q3 shipments grew by 7 percent QoQ and 10 percent year-over-year (YoY). This followed two consecutive relatively weak quarters as "CPU inventories normalized." While AMD's server ASPs were "flattish QoQ," BofA expects an upward trajectory in Q4 and into 2025 as the company ramps up the production of new products with a higher core count.
BofA now expects AMD's CPU market share to rise to ~27 percent by 2026:
"We believe AMD share gains to continue, reaching ~27% total CPU revenue share by CY26 vs. our prior <25% and just 19% in CY23."
On the flip side, the Wall Street titan has flagged the rise of Arm-based vendors as a key concern for AMD, especially as the market share of Arm-based server CPUs reached 7 percent in Q3'24 "vs. <5% in 2023 and ~1% in 2022."
BofA then goes on to add:
"We maintain our Buy on AMD (PC/server share gains, accelerator ramps) and ARM (content gains in mobile, PCs)."
Unsurprisingly, the bank remains bearish on Intel:
"We maintain our Underperform on INTC (CPU share losses, limited accelerator growth)."
Of course, BofA's assessment of AMD's market share dynamics closely resembles that of Rosenblatt's, which recently noted that the chipmaker would be able to capture a "double-digit GPU compute share" in 2025 without offering a significantly superior offering to NVIDIA's.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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