According to Melius Research, Intel and Advanced Micro Devices (AMD) are expected to see a rise in the second half of the year as part of a broader market recovery. The two companies, along with Apple and IBM, were tagged as “artificial intelligence laggards” in the first six months of 2024. Analysts noted a trend in 2023 where underperformers in the first half of the year saw a rebound in the second half, while some winners faced a decline.
Melius Research highlighted potential catalysts for AMD and Intel, such as Microsoft’s Copilot+ PCs which could benefit from their chips. Apple is poised for an AI-powered iPhone 16 upgrade cycle, while IBM is seen benefiting from the strength of its infrastructure software. Intel and AMD shares were up in afternoon trading, with Intel paring losses of over 30% this year and AMD gaining 20% since the start of 2024.
In a comparison with 2023, analysts expect a similar pattern in the second half of 2024, with companies like AMD, Intel, Apple, and IBM potentially catching up after lagging in the first half. The rise in spending by big tech on AI investments may play a lesser role in the second half of the year. Melius analysts see a potential “bounce back” for the mentioned companies.
AMD and Intel could benefit from Microsoft’s upcoming Copilot+ PCs launch, which could be a reason for users to upgrade. Apple’s AI-powered iPhone 16 upgrade cycle and recent partnerships were highlighted as potential growth drivers. IBM, on the other hand, is well-positioned to capitalize on the demand for infrastructure software.
Shares of Apple and IBM were slightly up on Monday afternoon, with Apple gaining nearly 18% and IBM up by 8% so far in 2024. The overall outlook for the second half of the year is positive for these companies, according to Melius Research.
The original article can be found on Investmentpedia for more information.
Article Source
https://finance.yahoo.com/news/why-ai-laggard-stocks-intel-181744010.html