Intel may never see 'peak' PC revenue again, thanks to Apple, AMD: Bernstein
Justin Sullivan

The correction in the PC market is firmly underway, as evidenced by results from AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC), the latter of which may never see its "peak" revenues from the segment ever again as Apple (NASDAQ:AAPL) and AMD (AMD) continue to take share, investment firm Bernstein said.
Analyst Stacy Rasgon noted that PC shipments in the fourth-quarter fell nearly 30% year-over-year, but inventory is being worked off. Notebook CPUs are now under-shipping notebook PCs by roughly 25% and desktop CPUs are also under-shipping desktop PCs.
And while Rasgon believes the correction still has "some ways to go," it looks as if Intel (INTC) is trying to prolong the correction, citing the use of its excess as a "weapon," providing incentives to customers to pull forward purchases at an "accelerating rate."
"[T]his suggests that the channel drain will take longer than it should, as customers, even if flushing out inventory, are still likely buying more parts than they otherwise would have," Rasgon added.
Rasgon has an underperform rating on Intel (INTC) and market perform rating on AMD (AMD).
The analyst explained that once the PC market normalizes, it will be a much different market, particularly for Intel (INTC), as Apple (AAPL) is now more than 10% of the market, compared to "virtually zero" prior to the pandemic. Separately, AMD (AMD) is now a more "viable" option and has continued to take market share away from Intel.
"Bullish company forecasts notwithstanding it seems likely to us that Intel will never see prior peak client revenues ever again," Rasgon posited.
On Tuesday, hedge fund Greenlight Capital, disclosed that it had exited its stake in Intel (INTC) during the fourth-quarter, while making several other changes to its portfolio.