In a discussion about recent semiconductor earnings, Bernstein’s Stacy Rasgon highlighted that investor focus is heavily centered on AI developments, especially in light of mixed results from major tech companies like Alphabet, which has raised concerns for AI-related stocks. He emphasized the importance of upcoming earnings reports from AMD and Intel, noting AMD’s underperformance compared to NVIDIA and the critical need for clear AI guidance to boost investor confidence.
In a recent discussion, Bernstein’s Stacy Rasgon provided insights on the semiconductor industry’s response to the latest earnings reports from major tech companies like Alphabet. The earnings report from Alphabet raised concerns among chip investors, particularly due to its capital expenditure (capex) guidance. While Alphabet’s capex was solid, the fact that it remained unchanged led to nervousness among investors, particularly affecting AI-related stocks like NVIDIA. The broader semiconductor market has also been under pressure, as many recent reports have not met expectations.
Looking ahead to upcoming earnings from Microsoft and Amazon, Rasgon noted that while a capex increase from these companies would be beneficial, it is not entirely expected at this stage of the year. The semiconductor sector has been experiencing fluctuations, with various companies reporting mixed results. Rasgon emphasized the importance of upcoming reports from Intel and AMD, as both companies have different focal points that investors will be keen to analyze. AMD’s performance, in particular, will be closely tied to its AI guidance.
Rasgon addressed the diverging performances of key players in the semiconductor space, specifically highlighting AMD’s underperformance despite being a significant competitor to NVIDIA. While NVIDIA’s stock has surged, AMD’s has only seen a slight decline this year. The analyst attributed this discrepancy to heightened expectations for AMD, with concerns surrounding potential issues with their products, such as high-bandwidth memory sourced from Samsung. These worries have contributed to a lack of confidence among investors ahead of AMD’s earnings report.
The conversation also touched on NVIDIA’s recent success and the importance of continued product delivery. NVIDIA’s last quarter alleviated fears of a transition period as they move to their new Blackwell architecture, and the demand for their current Hopper architecture remains strong. Rasgon believes that NVIDIA will need to maintain its momentum and deliver clear catalysts to keep investor confidence high. Expectations are elevated, and while Rasgon is optimistic about NVIDIA’s performance, the need for substantial growth in their numbers is critical.
Overall, the discussions underscored the significant focus on AI as the driving force for investor sentiment in the semiconductor sector. With ongoing economic concerns and fluctuating tech stock performances, the upcoming earnings reports from AMD, Intel, Microsoft, and Amazon will be pivotal in shaping market perceptions. Investors are eager to see how these companies navigate their AI strategies and capital expenditures amidst a rapidly evolving technological landscape.