Advanced Micro Devices, Inc. (NASDAQ:AMD) worries grew manifold after rival Intel Corporation (NASDAQ:INTC) raised a warning for low revenues in its first quarter as low PC shipments make a comeback. The softer outlook comes as International Data Corporation (IDC) forecasted higher fall in global shipments of business desktops and PCs than earlier. IDC said that the shipments could decline by 4.9% versus its earlier guidance of 3.3%.
PC shipments to go down
As per IDC, the PC space witnessed a slump as its share slipped 0.8% to $201 billion last year, and the fall will continue at a higher rate of 6.9% this year. The PC market share will shrink to $175 billion by 2019, IDC noted. In view of these projections, Intel Corporation had slashed its first-quarter revenue outlook by billion dollars, indicating a slump in PC demand accompanied factors such as sharp currency fluctuations.
Revenue might get the impact
Meanwhile, FBR Capital’s analyst Christopher Rolland does not anticipate Advanced Micro Devices, Inc. (NASDAQ:AMD) to announce a substantial cut in its revenues. He said that the shipments of consumer PCs were slightly higher than commercial PCs during the first two months of the quarter. Given the fact that Advanced Micro Devices, Inc. (NASDAQ:AMD) primarily sells more of consumer PCS and has already guided its outlook cautiously. Therefore any more substantial cut in the outlook is not projected.
Rolland added that the company might achieve only the bottom half range of its outlook based on the currency headwinds. At the same time, Susquehanna’s Chris Caso cited that there has been a fall in demand for desktop PC graphic cards. Caso said that this would serve as a headwind to Advanced Micro Devices, Inc. (NASDAQ:AMD) as well.
One could clearly see the concern surrounding the PC shipments translate into the share prices of the related companies. Advanced Micro Devices, Inc. (NASDAQ:AMD) too sank by nearly 3% to close the session at $2.76.