For 2012, his new Intel profit forecast is $2.44 a share, down from $2.48; for AMD he goes to 52 cents from 90 cents for this year, and to 90 cents from $1.05 for next year.
That said, Rasgon maintains his Market Perform rating on Intel and his Outperform view on AMD. The analyst notes that Bernstein is trimming its forecast for 2012 PC unit growth to 5% from 7%.
"We have taken our Q3 numbers for Intel down (as has much of the Street as of late), and would not be surprised (given PC data points) to see some caution in the guide, or at the very least to see a reduction in full-year expectations (currently for 'high single digit' growth), given we believe upside forthcoming from HDD snapback appears increasingly unlikely, and we remain unconvinced that Ultrabooks and Windows 8 will drive significant excess volume particularly given the high price points of reasonably-specced, touch-enabled systems," he writes. "We would note that, given how bad AMD's performance was, whatever Intel says is likely to look good by comparison."
Nonetheless, he is cautious on Intel shares. "We believe INTC faces an uphill battle in their efforts to drive Atom into applications outside the PC market (e.g., tablets and smartphones), and believe the bulk of the growth will continue to be determined by PC MPUs going forward," he writes. "Over the short term, questions about tablet cannibalization, the sustainability of server demand, the sustainability of gross margins in the mid 60s, and the eventual presence of ARM-based PCs are likely to weigh on the multiple."
As for AMD, he is more upbeat. Sort of.
"AMD's credibility following their preannouncement appears shot, and the shares are likely to languish at current levels for some time," he writes. "However, while the company remains a fundamentally risky bet, we believe investors can see upside from a solid (and margin-accretive) product portfolio, potential for solid cash flow and balance sheet deleveraging, recent high-impact management additions, and low investor expectations."
INTC this morning is down 20 cents, or 0.8%, to $25.05.
AMD is down 10 cents, or 1.9%, to $4.81.
