Why 'AI Laggard' Stocks Intel and AMD Could Get a Boost in the Second Half

Intel (INTC) and Advanced Micro Devices (AMD) could summation successful nan 2nd half of nan year, according to Melius Research, which referred to nan companies arsenic "AI Laggards" for nan commencement of nan year.

Intel shares were up much than 5% successful Monday day trading, narrowing their much than 30% year-to-date loss. AMD shares were up 3%, pinch nan banal gaining 20% since nan commencement of 2024. While nan chipmaker has gained much than nan S&P 500 index's astir 17% summation year-to-date, it importantly lags Nvidia (NVDA), which has much than doubled successful nan aforesaid period.

Could Second Half of 2024 Mirror 2023?

Melius analysts noted that nan "AI winners" of nan first half of 2023 knowledgeable a region successful nan past six months of 2023, while first-half "underdogs" gained.

They cited nan VanEck Semiconductor ETF (SMH), which gained 50% successful nan first half of 2023, but roseate only 15% successful nan 2nd half of 2023. Meanwhile, they said, companies including Intel and Dell saw their shares execute good successful nan 2nd half of past year.

The 2nd half of 2024 could bring a akin pattern, Melius analysts said.

AMD, Intel, Apple, IBM Could 'Catch Up' successful Second Half

"We are believers successful a 'catch-up' waste and acquisition for immoderate successful semis, hardware and moreover software" arsenic big tech's accrued spending connected artificial intelligence (AI) investments could beryllium little of a catalyst successful nan 2nd half of nan year, Melius analysts wrote.

They called retired AMD, Intel, Apple (AAPL), and International Business Machines (IBM), specifically arsenic first-half underperformers that could use from nan "catch-up."

Melius analysts said that AMD and Intel could use from their chips being successful Microsoft devices, arsenic nan institution is group to motorboat its "Recall" characteristic successful its Copilot+ PCs, which could beryllium "the closest point to a 'killer app' logic to upgrade."

Apple is group for an AI-supercharged iPhone 16 upgrade cycle, nan analysts said. Apple unveiled iOS 18 with Apple Intelligence and an AI business pinch OpenAI at its developers' convention successful June.

The analysts said infrastructure package could beryllium well-positioned to gain, naming IBM successful that area specifically.

Apple and IBM shares were creeping higher Monday afternoon, up almost 18% and 8%, respectively, year-to-date.