AMD shares fell on 30 October as investors reacted to Intel’s earnings, which brought server-chip production constraints and weaker PC sales into focus, MarketWatch reported.
Key points
- Intel cannot make enough server chips to meet demand for central processing units.
- Higher memory-chip prices are weakening PC sales.
- Nasdaq 100 futures fell 646 points, or 2.2%, on 30 October.
- AMD reports earnings on 3 November.
Intel cannot meet server processor demand
Intel is struggling to produce enough server chips to satisfy demand for central processing units. Its earnings put that production constraint alongside weakness in the market for personal computers. Investors will learn whether AMD faces similar pressures when it reports its own results.
The server pressure is a problem of supply meeting demand. Demand for Intel’s central processing units is robust, but the company cannot make enough server chips to satisfy it. The publication also described a shortage of AI server chips.
AMD’s share decline followed the reaction to Intel’s results. Investors will learn whether AMD faces some of the same pressures when it reports its own earnings. Intel’s difficulty making enough chips and the conditions facing AMD are separate questions for investors assessing the two companies.
Memory prices weigh on Intel’s PC sales
Intel is also dealing with weakening PC sales as memory chips become more expensive. That pressure comes from the price of another component in a computer, rather than from the availability of Intel’s server processors.
The distinction matters for AMD’s results. Intel’s earnings paired a constraint on the number of server chips it can supply with softer demand in PCs. AMD’s results will help investors assess whether it faces those same server-chip and PC-market pressures.
Intel’s outlook added to the market reaction. Investors were assessing forecasts from the chipmaker that fell short of expectations, Yahoo Finance reported. The report also described slower growth in parts of Amazon’s business as investors weighed technology earnings.
Nasdaq futures fall before AMD’s results
Nasdaq 100 futures fell 646 points, or 2.2%, on 30 October. S&P 500 futures declined 78 points, or 1.0%, while Dow Jones futures slipped 21 points, or 0.1%, Yahoo Finance reported. The futures moves followed a session on 29 October in which the Nasdaq Composite lost 1.38%.
AI infrastructure spending was another focus for technology investors. Alphabet lost more than $500 billion in market value after investors reacted to its plans for further AI investment, according to Yahoo Finance. Microsoft shares also ended lower as investors assessed its continued spending on AI. The company completed a $25 billion bond offering.
AMD has its own AI-related spending plans: an earlier AI Affairs report covered its planned $1 billion Meta investment and testing of Helios systems. Its next earnings will help investors assess whether it faces the server-chip and PC-market pressures reported at Intel.
AMD reports earnings on 3 November.
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