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Author: Alan LittleDate: 2020-10-26

Intel (INTC) shares down 10% as investors look to AMD (AMD)

Investors may have set their sights on Nvidia (NVDA) and AMD (AMD) after Intel’s (INTC) flat Q3 report resulted in a 10.58% share decline in trading on Friday.

Before the final session of the week got underway, Intel posted $1.11 earnings per share and $18.33bn revenue versus the $1.11 and $18.24bn Wall Street consensus.

While the semiconductor company’s big numbers were in line with expectations, there were a few sticking points in the overall report, with server CPU sales and gross margin both being weaker than anticipated.

The latter came in at 54.8%, which represented a 200-basis-point miss, and Intel warned that margin pressure would continue to be an issue in Q4.

While there were a few bright spots, including a rise in PC CPU and PC motherboard sales to $9.85bn, investors were underwhelmed.

Intel Stock

That indifference translated into a stock slump early on Friday.

INTC fell 10% when the markets opened and remained steadily in the red before closing 10.58% lower at $48.20, which extends its losses for the year-to-date to 18%.

Intel did provide a small increase to its earnings guidance for the full year, but it appears that investors would rather buy into its rivals for the time being.

AMD will report this week and is expected to make gains again as Intel stands still.

Analysts believe that AMD will increase its revenue from $1.8bn to $2.56bn year over year while delivering a healthy uptick in earnings per share ($0.35).

Cowen analyst Matthew Ramsay, offering an outperform rating, has tipped AMD to “move higher on strong notebook and console sales offsetting weaker pre-Zen3 desktop, while steady server share gains sustain”.

AMD closed 3.20% higher on the Nasdaq on Friday.

Nvidia also made gains after rising 1.72% to $543.61.

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