Nvidia, AMD Lead The Pack, Broadcom Stable, Intel Falters: Analyst's Latest Take

KeyBanc analyst John Vinh shared mixed quarterly supply chain findings for the semiconductor sector. The analyst revised several company estimates and price targets.

Though most end markets were weak in analog, he noted indications of auto getting closer to a bottom. Traditional server and AI strength is sustained, with Blackwell on track to launch in the fourth quarter without further delays, as per Vinh.

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The analyst’s feedback on the iPhone 16 launch appears to be better than feared but could be better. Therefore, Vinh downgraded Qualcomm Inc QCOM and Synaptics Inc SYNA to Sector Weight.

Given increased price competition, he expects Qualcomm to lose market share to Mediatek in the mid-to-low-end segment of the smartphone market. This headwind will compound the impacts of Apple Inc AAPL ramping up its internal modem.

The Synaptics downgrade reflects its underperformance versus its IoT peers, given limited growth catalysts within its Enterprise & Automotive segment, representing almost 60% of overall revenues and the company’s highest margins. Vinh flagged increased competition in the Chinese market from local chipmaker HiSilicon as another headwind.

Additionally, the analyst’s findings were most favorable for Nvidia Corp NVDA and Advanced Micro Devices, Inc AMD, mixed for Broadcom Inc AVGO, and negative for Monolithic Power Systems, Inc MPWR, Micron Technology, Inc MU, Marvell Technology, Inc MRVL, and Intel Corp INTC. He also fine-tuned his estimates on Arm Holdings plc ARM.

Vinh noted that Nvidia’s Blackwell will likely ramp into mass production beginning in December, contributing over $7 billion in revenues in the fourth quarter. He said Hopper demand remains strong, with fourth-quarter revenues increasing ~15% sequentially.

AMD’s positive catalysts included traditional server demand, the inflection in Genoa instances in the cloud, demand for MI300X remains on track to ship 500K GPUs in 2024, and a possible update on its next-generation GPU and CPU at its AI event on Thursday.

For Broadcom, Vinh flagged sustained networking demand from improving traditional server demand, share gains from its 800Gb optical DSP launch, and higher revision of CoWoS demand. Broadcom’s upsides could be offset by Apple preparing its Wi-Fi 7 radio for the iPhone 17 in 2025.

For Micron, Vinh flagged oversupply as Micron prompts Samsung to convert its unused HBM capacity back to traditional DRAM to survive the competition.

Monolithic Power Systems remains vulnerable, given RMAs (Return Merchandise Authorization) for Nvidia H100 AI servers related to field failures associated with Monolithic Power Systems’ power modules increasing again, affecting its market share on Blackwell.

Vinh highlighted his adverse findings from Asia for Marvell Technology. According to the analyst, Marvell is vulnerable to market share loss from the next-generation AWS Trainium 3 loss to Alchip, Google’s second-generation Axion ARM CPU, and Nvidia’s development of its 1.6T optical DSP.

Vinh mentioned his negative findings from Asia for Intel. The analyst highlighted Intel’s server market share loss to AMD and the ramp of Blackwell posing a headwind for Intel. He also flagged the lack of a cost-down AI CPU targeted at mass market AI PCs is likely to result in a share loss for Intel and disappointing feedback on Intel’s AI chip Gaudi 3.

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