Citi Backs AMD as Notebook Shipments Beat Expectations, Intel Gets Neutral Amid PC Slowdown

Citi Research has reaffirmed its Buy rating on Advanced Micro Devices (AMD) and maintained a Neutral rating on Intel (INTC) following a report on December notebook shipments. The report indicated that December notebook shipments rose 8% month-over-month, outperforming Citi's expectations of a 4% increase. This strong performance was driven by new product launches, demand ahead of the Chinese New Year, and potential tariff concerns.

Citi analyst Christopher Danely attributed the growth in notebook shipments to these factors and noted that the better-than-expected December performance provides some optimism. However, he also highlighted expectations for a 10% sequential decline in notebook shipments in Q1 2025, which aligns with Citi's view of continued "sluggish" PC demand. The analyst kept his Buy rating on AMD and a Neutral rating on Intel, emphasizing expectations for a 10% sequential decline in notebook shipments in Q1 2025, better than the typical seasonal 14% drop.



AMD's strong notebook shipments can be attributed to its innovative product offerings, such as the Ryzen 7000 series processors, which have been well-received by consumers and OEMs. To maintain its momentum in the notebook market, AMD should focus on continuing to innovate and improve its product offerings, strengthening partnerships with OEMs, and expanding into new market segments like gaming notebooks. By optimizing its pricing strategy and enhancing marketing efforts, AMD can attract more customers and increase its market share.

Intel, on the other hand, faces a more challenging environment due to the PC market's slow recovery and persistent weak demand. Despite Intel's recent performance, Citi's analyst expects a 10% sequential decline in notebook shipments in Q1 2025, which reflects the market's sluggishness. Intel should focus on addressing supply chain challenges, optimizing its product portfolio, and improving its competitive position in the market to better navigate the current PC market slowdown.

In conclusion, Citi's reaffirmation of its Buy rating on AMD and Neutral rating on Intel highlights the differing prospects of these two tech giants in the face of the PC market's slow recovery and persistent weak demand. AMD's strong notebook shipments and innovative product offerings position it well to capitalize on market opportunities, while Intel must address the challenges posed by the current market environment to maintain its competitive edge.