Chip Boom or Bust? AMD and Intel Face a Hidden Threat That Could Crush Margins

Khac Phu Nguyen

Tue, Mar 11, 2025, 10:17 AM 1 min read

AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC) conscionable landed successful the capitalist spotlight arsenic Citi raised concerns astir a imaginable inventory physique successful the CPU market. February notebook shipments climbed 6% month-over-monthright connected cue with expectationsbut there's a reddish flag. Citi expert Christopher Danely pointed retired that portion CPU shipments grew astatine a debased double-digit gait successful the 2nd fractional of 2024, PC portion income lone managed mid-single-digit growth. That spread raises the anticipation of excess banal piling up, which could make downward pricing pressure.

• Warning! GuruFocus has detected 3 Warning Signs with AMD.

Despite the inventory worries, Citi isn't sounding the alarm conscionable yet, keeping its Neutral ratings connected some AMD and Intel. The steadfast inactive expects PC portion shipments to tick up 4% year-over-year successful 2025, with Q1 notebook shipments projected to driblet 10% quarter-over-quarterbetter than the humanities 14% decline, acknowledgment to a anemic examination base. But if inventory levels commencement climbing faster than demand, some spot giants could find themselves successful a pugnacious spot, navigating imaginable borderline squeezes successful an already competitory industry.

For now, each eyes are connected the equilibrium betwixt accumulation and end-user demand. The semiconductor abstraction has seen its just stock of proviso concatenation swings, and immoderate misstep successful inventory absorption could spell trouble. Investors are watching however AMD and Intel presumption themselves for the adjacent signifier of the cycleespecially with AI-driven computing. If request doesn't support pace, we could spot pricing unit deed sooner alternatively than later.

This nonfiction archetypal appeared connected GuruFocus.