Amid mounting evidence of a steep decline in PC sales, slowing data center revenue and anemic growth in flash memory, chip stocks are falling sharply again today. Today’s drop marks a continuation of the slide that chip names have experienced in recent days.
Also contributing to the sector’s recent woes has been dwindling crypto-mining spending and, of course, the general decline in US stocks since Fed Chair Jerome Powell’s press conference on Wednesday.
New evidence of the sector’s weakness
After meeting with executives from chip manufacturers Intel (NASDAQ:INTC) and AMD (NASDAQ:AMD), Bernstein analyst Stacy Rasgon reports that global PC sales are falling more than companies previously expected.
Intel CFO David Zisner said PC sales will fall more than 10% year over year. In July, the chip maker predicted that PC sales would fall 10% in 2022 compared to 2021.
Dan McNamara, who heads AMD’s business server division, agreed that the PC market will fall more than expected this year. The chip maker previously expected PC sales to fall by about 15% in 2022.
In addition, Zisner reported that “the data center market has weakened,” Barron’s warn. He blamed lower demand from Chinese companies and macro trends for the latter.
Earlier this week, I noticed that Mizuho Securities analyst Vijay Rakesh lowered micron (NASDAQ:MU) and Western Digital (NASDAQ:WDC), citing weaker demand for the companies’ flash memory, server and hard drive products.
Another problem and one bright spot for token stocks
At the end of August, Nvidia (NASDAQ:NVDA) noted that its gaming chip revenue fell by a whopping 44% in the second quarter compared to the first quarter. NVDA also lowered its third-quarter revenue guidance, blames worse-than-expected sales of your gaming chips. More commenters have found a fall in cryptocurrencies, resulting in much less crypto mining, which is the main catalyst for the decline in demand for Nvidia’s gaming chips. The latter chips are often used to facilitate crypto mining.
Nvidia is also worth mentioning selling chips to data centers.
It is positive Qualcomm (NASDAQ:QCOM), another leading chipmaker, reported yesterday that he expected the total addressable market for automotive chips to reach about $100 billion by 2030. Additionally, the chipmaker said its “design win program” jumped to $30 billion, up from a previous estimate of $19 billion.
As of the date of publication, Larry Ramer did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are the subject of InvestorPlace.com Publishing Guidelines.