According to Bank of America (BofA), AMD is making substantial gains in CPU market share, capitalizing on Intel's recent struggles. Leveraging data from Mercury Research, BofA's analysis of Q3 2024 reveals key trends in the CPU market.
Intel's PC shipments declined by approximately 3% quarter-over-quarter, while market demand grew by 7.5%, based on IDC's estimates. This allowed AMD to increase its market share by an impressive 15% quarter-over-quarter. BofA attributes this partly to AMD's stronger presence in the Western consumer and desktop markets, compared to Intel's focus on the weaker Chinese and enterprise/notebook segments.
Despite shipment discrepancies, both Intel and AMD saw average selling prices (ASPs) rise by around 5% due to the increasing popularity of pricier AI-enabled PCs.
Server Market Growth
AMD also experienced growth in the server market, with Q3 shipments increasing by 7% quarter-over-quarter and 10% year-over-year. While server ASPs remained relatively flat, BofA anticipates growth in Q4 2024 and into 2025 as AMD ramps up production of new, higher-core-count products.
Future Market Share Projections
BofA projects AMD's total CPU revenue share to reach approximately 27% by 2026, up from less than 25% previously predicted and just 19% in 2023.
"We believe AMD share gains to continue, reaching ~27% total CPU revenue share by CY26..." - BofA
However, the rise of Arm-based vendors poses a potential challenge for AMD. Arm-based server CPUs captured 7% of the market in Q3 2024, significantly up from previous years.
Investment Outlook
BofA maintains a "Buy" rating on AMD and Arm, citing PC/server share gains and accelerator ramps for AMD, and content gains in mobile and PCs for Arm. Conversely, BofA maintains an "Underperform" rating on Intel due to CPU share losses and limited accelerator growth.
This is not investment advice. The author has no position in any of the stocks mentioned.
Source:@stocktalkweekly
