Citi says big tech earnings ‘bad news’ for AMD, Intel

Citi sees “bad news” for Intel (INTC) and AMD (AMD) in the earnings reports from three of the largest cloud service providers – Alphabet (GOOG, GOOGL), Meta (META), and Microsoft (MSFT). Meta lowered 2023 capex 10% and Alphabet’s Q2 capex was lower than anticipated, the analyst tells investors in a research note. Microsoft’s fiscal Q4 capex of $8.9B beat the consensus of $8.1B, but the company didn’t provide a full year capex guide for fiscal 2024, adds the firm. It believes the Street was expecting a raise in capex given the strength at Nvidia was expected to broaden out to other artificial intelligence chip suppliers. Citi is below consensus on AMD as it expects the company to lower Q3 guidance given weakness in the data center market. It has a “negative catalyst watch” on AMD and remains Neutral rated on both AMD and Intel.