Sep 29, 2022 (PressReach.com via COMTEX) -- The PC market continues to be sluggish, and Bank of America downgraded Apple /zigman2/quotes/202934861/composite AAPL -1.96% due to concerns about customer demand, which hurt the company’s suppliers. Semiconductor stocks plunged on Thursday.
Christopher Rolland, a Susquehanna analyst, lowered his estimates and price targets for Advanced Micro Devices /zigman2/quotes/208144392/composite AMD -1.65% , Intel /zigman2/quotes/203649727/composite INTC -1.11% , and Nvidia /zigman2/quotes/200467500/composite NVDA -1.51% , noting that channel checks indicate lower shipments of PCs and notebooks, which are now down by 17% and 20% year over year, respectively.
Even before the launch of its Ryzen 7000 series, AMD (AMD) continued to observe market share growth on Chromebooks as well as desktop and laptop CPUs, according to Rolland. That, however, is insufficient for the company to maintain its estimates.
In a note to customers, Rolland stated, “Overall, we are reducing projections for AMD, INTC, and NVDA to reflect our updated PC shipment prediction and deteriorating PC industry checks (and US prohibition on AI GPUs).” In midday trade, AMD stock dropped more than 6%, while Intel (INTC) and Nvidia (NVDA), both located in California, plummeted 2.5% and 4.5%, respectively.
AAPL stock /zigman2/quotes/202934861/composite AAPL -1.96% dropped to levels not seen since late June after Bank of America downgraded the tech titan and lowered its iPhone predictions for the upcoming quarters. According to the company, Cirrus Logic /zigman2/quotes/208789077/composite CRUS -2.37% , Skyworks Solutions /zigman2/quotes/201417573/composite SWKS -2.19% , and Qorvo /zigman2/quotes/209919828/composite QRVO -1.68% were mentioned as some of the businesses most likely to be harmed by the drop in iPhone predictions. The investment firm reduced its projections for iPhone sales by 5% to 10% for the following three quarters, which could have a negative effect on demand for the semiconductor sector as a whole by 10% to 15%.
A Bank of America analyst (Wamsi Mohan) said foundries including Taiwan Semiconductor /zigman2/quotes/204359850/composite TSM -0.70% and GlobalFoundries /zigman2/quotes/230483311/composite GFS +0.04% , as well as semiconductor capital equipment and testing tools, may also be impacted in addition to the aforementioned suppliers. “Discretionary consumer spending across PC, phone, cars and gaming substantially influences semiconductor demand. Thus sluggish iPhone demand could be symptomatic of additional weakening in other end-markets,” Mohan wrote in a note to investors.
While Skyworks Solutions /zigman2/quotes/201417573/composite SWKS -2.19% and Qorvo /zigman2/quotes/209919828/composite QRVO -1.68% both dropped by close to 4% and 1%, respectively, Cirrus Logic /zigman2/quotes/208789077/composite CRUS -2.37% dropped by more than 3.5%. The three businesses are categorized as “high risk,” with the potential to lose between 3% and 5% of sales, while Qualcomm (QCOM) and Broadcom are considered to be “moderate risk,” or only likely to experience a 1% to 2% decline in revenue /zigman2/quotes/200646538/composite AVGO -0.70% .
While diverse semiconductor companies, including Texas Instruments /zigman2/quotes/202237907/composite TXN -1.07% , Analog Devices /zigman2/quotes/201631938/composite ADI -1.25% , and NXP Semiconductor /zigman2/quotes/202999625/composite NXPI -1.43% , saw declines of between 2% and 3%, Qualcomm /zigman2/quotes/206679220/composite QCOM -1.36% and Broadcom /zigman2/quotes/200646538/composite AVGO -0.70% each saw declines of slightly less than 3.5%. Ahead of the company’s fourth-quarter earnings, which some analysts predict will likely reveal an ongoing decline, Micron’s (MU) shares decreased by over 2%.
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