Shares of Advanced Micro Devices Inc. (AMD) and Broadcom Inc. saw their sixth and fifth consecutive sessions of losses, respectively, while Intel Corp.’s stock was on track to turn in its worst week in years.
AMD shares fell 1% on Friday, contributing to a total drop of 8.7% over the holiday-shortened week. This week’s performance put them on track for their worst week since September 2020. AMD recently launched its line of AI data-center products, which was similar to Nvidia Corp.’s announcement back in March.
Similarly, Broadcom shares fell 1.9% on Friday, marking the sixth consecutive day of losses for the company. The stock was on track for a loss of 5% on the week, making it their worst showing since October 2020.
Intel couldn’t catch a break either, and its stock was experiencing its worst week since October 2020. Currently, Intel’s shares are down 10.2% for the week, according to Dow Jones data.
Earlier this week, Intel earned the dubious distinction of being the worst stock on the Dow Jones Industrial Average for two days in a row following the chipmaker’s announcement of its strategy for its third-party fab business, meant to compete with Taiwan Semiconductor Manufacturing Co. However, Intel has yet to secure any major customers for this venture.
In conclusion, chipmaker stocks continue to show signs of weak performance in the market despite their efforts to introduce new products and expand their services.
Intel’s Foundry Operations Set it Apart From Competitors
Intel is unique among chip makers, as it operates its own foundries. These high-tech plants create the silicon wafers used to produce microchips using etched transistors. In contrast, other companies like Nvidia, AMD, Qualcomm, and Apple opt for a “fabless” approach, using third-party foundries like TSMC for their chips.
Despite this, Intel’s first major contract foundry customer remains shrouded in mystery. Analysts are sifting through presentations to obtain more details.
The PHLX Semiconductor Index, a barometer for the broader chip sector, was down 4.4% for the week—its worst performance since April 6th when the index finished 4.9% lower. Currently at 3,520, the chip index is 6% below its recent 52-week high of 3,673.14.
Even though Intel’s shares rose 25% year-to-date, outperforming the Dow Jones Industrial Average’s modest 2% gain, IBM’s shares declined by 5.6% for the week—its worst since August 26th when shares fell 5.8%. Compared to the nearly 8% drop in IBM shares on the year, AMD rose by 70%, while Broadcom increased by 48%.
According to analysts, Nvidia is the only “beat and raise” chip maker in the near term for AI. However, AMD’s shares remain healthy, seen with its impressive YTD growth of 70%, while Broadcom’s shares have grown by 48%. In comparison, the SOX index gained 39%, the S&P 500 index advanced by 14%, and the Nasdaq Composite Index rallied by 30%.
