Qualcomm, AMD and Intel get wildly different views from HSBC
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HSBC analyst Frank Lee woke up Monday with semiconductors on his mind, as he initiated coverage with a range of different opinions on a range of different chip-sector leaders.
Lee started his coverage of Qualcomm (NASDAQ:QCOM) with a buy rating, started Advanced Micro Devices (NASDAQ:AMD) with a rating of hold, and set his view of Intel (NASDAQ:INTC) at reduce, which is polite analyst-speak for "sell".
With regards to Qualcomm (QCOM), Lee said the company is "well-positioned for growth" beyond its longtime bread-and-butter smartphone chips.
Lee said Qualcomm has "the most complete technology offering" of any chipmaker, which "enables it to expand its product portfolio beyond the slowing smartphone segment and into autos and Internet-connected devices." Lee also set a $180-a-share price target on Qualcomm's (QCOM) stock.
Moving down the rating ladder, Lee gave AMD (AMD) a hold rating and $60-a-share price target on the company's stock. Lee said AMD (AMD) has both some positives and negatives going for it heading into 2023.
Lee said that he expects the "significant gains" AMD (AMD) has made in sales of central processing units since 2019 should continue and rise up to 24% of the notebook market, and 19% of the server industry by the end of next year.
However, Lee said the "bad news" facing AMD (AMD) is that such gains are already "priced in, and uncertainty about PC and server demand" outweighs any potential new market share gains.
Intel (INTC), and its reduce rating, gave Lee little to be positive about, and Lee called the chipmaker "The tech giant which lost its way in recent years."
Lee said the outlook for Intel (INTC) remains "challenging" due to factors such as delays in new product launches and the loss of market share in chips for PCs and CPUs for the last four years.
"We think this trend will continue," said Lee, who estimated that Intel (INTC) will see it fall to 73% of the market for notebook chips, and 80% of the market for server CPUs by the end of 2023.
Intel (INTC) is scheduled to report third-quarter results after the close of trading on October 27. Last week, Intel (INTC) Chief Executive Pat Gelsinger said job cuts are coming to the semiconductor giant.