Barclays positive on AMD and Qualcomm, downgrades Applied Materials

Yahoo Finance Live anchors discuss Barclays upgrading its outlook on AMD and Qualcomm.

Video Transcript

BRIAN SOZZI: That, too.

JULIE HYMAN: Let's also talk about what's going on in semiconductors today. We talked about Intel reporting this week, but we've got a call on the chip industry from Barclays, which is upgrading its outlook on AMD and Qualcomm to overweight and downgrading Applied Materials to underweight. And the stocks there are moving accordingly. A blank courtesy analyst here sort of saucy in the note. I enjoyed the tone here.

BRIAN SOZZI: Saucy.

JULIE HYMAN: Talked about being negative last year on semiconductors broadly and sort of getting attacked by some retail investors, and now finding themselves getting positive here. And they said, we've seen other downturns within chips. They're not quite as cheap as they were in past down terms, but it sounds like that they are cheap enough. We underestimated the amount of money that wanted to move into semis. We don't see the group testing October lows, according to Curtis in this note.

BRIAN SOZZI: And the analysts also just doubling down this thesis in the marketplace that AMD will continue to take market share from an Intel, which ties back to what I mentioned earlier on the show. We might see one more reset on guidance from Intel when they report earnings later in the week, I believe it's Thursday after the close. There, Intel is really not expected to be back in a leadership position on chips until 2025. And then even then, that leadership potential may not be as wide as some investors think.

BRAD SMITH: Well, it comes back to also something else that we were talking about earlier in AI. And that was part of this as well, saying that for NVIDIA, at least, they're still a leader in GPU/AI, analyst writing there. And then you think about what this would also mean, more broadly, internationally. You look to China. China, the reopening there, they're saying is a big theme for 2023. Qualcomm would be one of the winners in that category here.

So even within this kind of wide ranging look at semiconductors, which were battered in 2022, it seems like there's now starting to get some nibbling on that rebound on some of the tailwinds, at least, of what AI could mean for everything from the data center, even to the pieces of technology that we operate within on a daily day in and day out basis, but then also regionally, what this could mean and particularly in China, as they're looking to see Qualcomm as a clear leader at the high end there.

BRIAN SOZZI: That was a really nice ratings graphic by our very own Conor Hickey, who gets up very early in the morning to make these things. I think he's on the train after me over in [INAUDIBLE] Long Island. So good to see graphics like that. That's really helpful.

JULIE HYMAN: [INAUDIBLE] train at the same time, you know?

BRIAN SOZZI: No, we're on the same train. He doesn't want to-- no, he takes, I think, the 10 minute one after me. You know, it comes by [INAUDIBLE].

JULIE HYMAN: Oh, I didn't know there were trains that frequent.

BRIAN SOZZI: But look, up early and you get great-- we get great graphics like this.

JULIE HYMAN: It's true. We had that whole period of time where every chipmaker we talked to was talking about automakers, automakers, automakers, and chips that go into autos. That's still a big part of the conversation, and AI has been a part of the conversation, but it feels like they're really going to be pushing that narrative more and more as it becomes more part of the brunch conversation, for example, Brad. AMD, by the way, reports not tomorrow, but next Tuesday. So we're going to be watching those numbers--

BRIAN SOZZI: I'm psyched.

JULIE HYMAN: --closely--

BRIAN SOZZI: I'm so pumped.

JULIE HYMAN: --coming as they will after Intel. He's really pumped. He's always pumped.