• Semiconductor companies like Intel, AMD, and Arm Holdings will publish their earnings.
• The three companies have underperformed the popular semiconductor ETFs.
• Analysts have mixed hopes about Intel and AMD.

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Advanced Micro Devices (AMD) and Intel (INTC) stock prices will be in the spotlight this week as the two semiconductor giants publish their financial results. AMD will come first on Tuesday while Intel Corporation will follow next on Thursday. 

The two semiconductor companies have diverged this year and underperformed their peers. AMD stock has dropped by 5% this year while Intel shares are down by over 37%. In contrast, the iShare Semiconductor ETF (SOXX) has risen by almost 20% while the VanEck Semiconductor ETF (SMH) has jumped by almost 40%.

AMD earnings preview

AMD, one of the biggest semiconductor companies, has done well over the years as its revenues have jumped from $6.7 billion in 2019 to over $22.6 billion in 2023. This growth happened as the company continued to take market share in the CPU industry from Intel. 

The growth has also happened because of its strategic acquisitions. Its most important buyout was Xilinx, a company that makes adaptive solutions for the semiconductor industry. 

AMD now commands a market share of 33% in the CPU industry, a big increase from 17.5% in 2016. Intel’s share has dropped from over 80% in 2015 to 63% today. This trend will likely continue as Intel woes continue.

Just last week, it was revealed that Intel had found the root cause of an issue plaguing its 13th and 17th generation chips. The issue led to elevated voltage, and according to The Verge, it cannot be fixed. 

These issues, together with Intel’s manufacturing challenges, have led to AMD taking market share. 

However, recently, there are signs that AMD’s growth trajectory has faded. Its most recent financial results showed that its revenue rose from $5.35 billion in Q1’23 to over $5.4 billion in Q1’23. Nvidia (NVDA), which is ran by Jensen Huang, AMD’s CEO cousin, grew by 200% in the same quarter.

At the same time, AMD is no longer the growth engine it was a few years ago while its profits have dropped. Its net income came in at $123 million in the first quarter. 

Analysts expect that AMD’s revenue for the second quarter will be $5.72 billion, up by 6.8% from the same period in 2023.

These woes have happened because AMD is more exposed to the PC industry than Nvidia. To solve the crisis, AMD has recently launched several AI-focused semiconductor products. And analysts expect that the company will capture about 10% of the AI market in the future.

AMD stock price analysis

Turning to the daily chart, we see that the AMD share price has been in a freefall this year, as I predicted. It has dropped from about $190 in July to $140. Along the way, the stock has crashed below the 200-day and 50-day moving averages and the key point at $140.97, its lowest swing on May 2nd.

Therefore, the path of the least resistance for AMD is downwards, with the next point to watch being at $130. However, in some cases, we see highly troubled stocks jump after their earnings, which could happen in Intel’s case. If this happens, it could rise to the 50-day moving average at $152.

Intel earnings preview

Intel, like AMD, has trailed other semiconductor companies this year. In addition to the woes mentioned above, there are concerns about its strategy of becoming the biggest chip manufacturer in the US will be the right one. 

The average estimate is that Intel’s revenue will be $12.94 billion, a few points below the $12.95 billion it made a year earlier. For the year, analysts expect that its revenue will be $55.6 billion, 2.7% above its 2023’s $54.23 billion. 

Analysts expect that Intel’s earnings per share will be $0.10 , a small increase from the $0.13 it made in Q2’23. 

Intel has dropped because of the ongoing woes that have caused to permanent damage in millions of laptops. These challenges mean that AMD will likely continue gaining market share because its CPUs are some of the best.

Like AMD, Intel has also launched more advanced artificial intelligence semiconductors as it seeks to compete with Nvidia. With Intel’s quality issues, it is unclear whether these semiconductors will gain market share.

Intel stock price analysis

INTC chart by TradingView

The daily chart shows that the INTC share price peaked at $50.91 earlier this year and has bow slumped to $30. It formed a death cross pattern – where the 200-day and 50-day moving averages cross each other – on April 26th.

Intel stock has remained below the important 200-day moving average since then. It has also dropped in the past 10 consecutive days and is hovering near its lowest point on July 3rd. 

Therefore, the stock will likely continue falling as sellers target the year-to-date low of $29.7. A break below that point will lead to more downside.

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