The PC industry is reeling from a shift to mobile devices and investors will get a report card this week from the two biggest chip suppliers to the sector — Intel and Advanced Micro Devices.
Judging from reports last week that AMD plans to slash its work force by 20 to 30 percent, it isn't likely to be a pretty picture.
Santa Clara-based Intel (NASDAQ:INTC) supplies 80 percent of the chips used in PCs around the world, last month cut its revenue forecast to $13.2 billion, compared to $14.2 billion in the same quarter last year.
It also reportedly plans to reduce the work force at its McAfee data security unit.
Analysts expect Intel's adjusted earnings to fall to 50 cents per share from 65 cents reported last year.
More closely watched will be its forecast for revenue in the current quarter, which Wall Street expects to be $13.8 billion, down slightly from last year's $13.89 billion.
A big question is whether some of the slump may be because consumers are waiting for Microsoft's (NASDAQ:MSFT) new operating system, Windows 8, to arrive this month before upgrading their PCs.
Investors will also be watching for signs that Intel is making the shift to supplying chips for non-PC devices as well. Some are already used in smartphones and a range of Windows 8-powered tablets are expected to use its chips, too.
But the bulk of Intel revenue still comes from sales of PCs by its customers.
AMD is expected to post an adjusted loss of a penny a share on Thursday, compared to a 15-cent-a-share profit a year ago. Revenue is projected to drop 21 percent from last year's levels to about $1.34 billion.
Looking ahead, analysts project earnings of 4 cents a share on revenue of $1.4 billion, both well below a year ago.
AMD's troubles are likely to renew speculation that it might be bought while its stock is cheap. Among the companies mentioned as potential buyers of the Sunnyvale chip giant are Qualcomm (NASDAQ:QCOM) and Dell (NASDAQ:DELL).
The company's stock (NYSE:AMD) hit a 52-week low on Friday of $2.74, down more than two-thirds from earlier this year.
Intel stock also hit a 52-week low on Friday, dropping as far as $21.40. That's down 27 percent from its high for the year, which it hit in May.