AMD - Advanced Micro Devices

[kc3]

AMD over the last few years has been severely lacking behind Intel and the stock is down to $2.14 a share and is losing money, however AMD is still being held up due to the latest gen consoles using their processors. AMD is supposed to be finally releasing a new generation of CPUs next year that will hopefully get people using their processors again (AMD for a long time was regarded as the best value for performance vs price). Though risky I think this might be something with some potential within the next couple of years. Thoughts?

[JayGatsby]

Personally I prefer Intel. I think it has much less risk and still has some good upside. Intel is about as close to a monopoly as you can find. Seems like the story has been the same for AMD forever, but they just don't have the R&D or marketing budget that Intel has and can't catch up. Intel has ~98% market share in servers and ~75% market share in PCs. The cost of processors nowadays seems low enough that most people (and IT departments) would rather go with what they know.

 

More on Intel but that's a story for another thread...

[ritrading]

I was looking for computer parts and noticed a new AMD processor. Just for fun, I decided to check the CPU benchmark site to see how AMD's new processors compared against Intel's. AMD had been very far behind in terms of technology. They were forced to price their processors based on Intel's comparative workload. Even at comparable speeds and prices, AMD's chips were consuming a lot more power, and AMD had a much lower profit margin.

 

The new AMD chip I saw (Ryzen 7) performed better than a comparable Intel chip, was priced lower, and consumed less power. This was very surprising to me. Maybe AMD is finally catching up in terms of technology. Unfortunately, AMD's still not turning an operating profit on their financial statements. If the specs are correct, the AMD chip could potentially be priced much higher. Years of lagging behind Intel may be why AMD is forced to underprice a better chip.

 

Anyone have some more insight on this? Has anyone used their chips lately? Is it possible for AMD to get a bigger market share, reach pricing parity, and show some positive net income?

[Pauly]

Ryzen looks like a decent chip...but Intel is releasing their i9 chips (10+ cores) and slashing prices across the board. They're not going planning to let AMD have any kind of advantage for long. I appreciate AMD for keeping INTC from resting on their laurels, but it's gotta be tough to be the second biggest player and be less than 1/10th the size of #1.

If you think an AMD CPU looks attractive, just wait a month or two and Intel will have something even prettier.

[DTEJD1997]

I was looking for computer parts and noticed a new AMD processor. Just for fun, I decided to check the CPU benchmark site to see how AMD's new processors compared against Intel's. AMD had been very far behind in terms of technology. They were forced to price their processors based on Intel's comparative workload. Even at comparable speeds and prices, AMD's chips were consuming a lot more power, and AMD had a much lower profit margin.

 

The new AMD chip I saw (Ryzen 7) performed better than a comparable Intel chip, was priced lower, and consumed less power. This was very surprising to me. Maybe AMD is finally catching up in terms of technology. Unfortunately, AMD's still not turning an operating profit on their financial statements. If the specs are correct, the AMD chip could potentially be priced much higher. Years of lagging behind Intel may be why AMD is forced to underprice a better chip.

 

Anyone have some more insight on this? Has anyone used their chips lately? Is it possible for AMD to get a bigger market share, reach pricing parity, and show some positive net income?

 

I used to sell a LOT of AMD's older chips, ie. 8320e, 8350, 9590....sometimes 40-50 a month.  They were decent chips at an EXCELLENT price...Sure Intel's chips were superior in most ways...but you would be paying 2x or more for that performance.

 

The new Ryzen chips are actually SUPERIOR to most Intel chips if you are using multi-threaded tasks, such as video rendering and other computationally intensive applications.  The Ryzen 1800x is approximately 1/2 the cost of Intel's comparable chip.

 

Sure, Intel is going to release better/faster chips, and sure they are going to lower their pricing...but it is going to be a closer race than before I think.

 

AMD has made great strides from what I hear.

 

I have yet to sell/use a single Ryzen processor.  I will probably start getting them in a week or so, certainly before the end of July.  I'll post my impressions of them once I start working with them.

[beerbaron]

AMD should have good results for the rest of the year, it's Video Card business is likely going to post great results because their RX580 cards are in high demand due to crypto currency miners. They also have a high end card coming out any days now and it is likely going to be quite competitive, it it computes hashs faster than a 1080 of 2xRX580 you can be sure that miners will keep the demand high.

 

Furthermore, their Ryzen chips are very competitive. You can see Ryzen being used in a lot of new desktops, I don't think they have had such a competitive CPU since the Athlon.

 

So for this year all stars seem aligned, if they can't turn a profit now when will they be able to?

 

On the valuation side it makes no sense, the company has been cash flow negative/breakeven for a while but a market cap of 11 billions... Yes they have IP but that is a steep cost for it.

 

BeerBaron

[flesh]

After not playing fps for three years I bought doom and a new video card, rx 480 8gb.... played for a month or so and found the online multiplayer too easy compared to previous ID software creations. I deleted the game and thought I should sell my card. I paid 240 new a few months ago.... looked at my local classifieds online and noticed they were selling used for 350-550! Anyways, sold my card yesterday in 4 hours for 350, really strange. Is there a causal reason for this phenomena to be pushing up amd's share price? Is it temporary? Is this a temporary or longer term backlog resulting from crypto mining?

[Liberty]

After not playing fps for three years I bought doom and a new video card, rx 480 8gb.... played for a month or so and found the online multiplayer too easy compared to previous ID software creations. I deleted the game and thought I should sell my card. I paid 240 new a few months ago.... looked at my local classifieds online and noticed they were selling used for 350-550! Anyways, sold my card yesterday in 4 hours for 350, really strange. Is there a causal reason for this phenomena to be pushing up amd's share price? Is it temporary? Is this a temporary or longer term backlog resulting from crypto mining?

 

Sounds like this is a crypto mining phenomenon at the current time:

 

http://www.cnbc.com/2017/06/06/amd-surges-because-bitcoin-miners-need-its-graphics-cards.html

[Jurgis]

I've been looking at this and INTC recently trying to figure out if it would be worthwhile to invest. I might post some thoughts on INTC board too.

 

AMD:

Positives:

- Sales growth, marginally profitable quarter

- Lots of sales into the bitcoin mania mining.

- Consolidation ongoing: this could be nice snack for someone to acquire.

- New competitive (?) CPUs.

 

Negatives:

- Even with increased sales, the profit is minimal, FCF is minimal.

- They got rid of fabs. As fabless they should have huge margins. They don't.

- CPU fight is still very tough. Intel can just bury them with price war.

- GPU fight is still very tough. Nvidia can just bury them with price war.

- AI/GPU is Nvidia's domain so far. I don't see AMD making big inroads.

- Bitcoin mining sales can dive if mining dives or goes spec-chips (I thought it already went spec in the past, maybe it's just new maniars who use AMD GPUs...)

- If there's PC/server downturn, AMD will lose CPU sales and go to losses again.

 

In general, I still think negatives outweigh the positives. OTOH, it's still quite cheap on P/S basis vs INTC and especially NVDA. Theoretically, if someone could drive AMD to take a chunk of AI/GPU space, they could explode up. That's before or after being acquired...

 

Thoughts?

[rkbabang]

I've been looking at this and INTC recently trying to figure out if it would be worthwhile to invest. I might post some thoughts on INTC board too.

 

AMD:

Positives:

- Sales growth, marginally profitable quarter

- Lots of sales into the bitcoin mania mining.

- Consolidation ongoing: this could be nice snack for someone to acquire.

- New competitive (?) CPUs.

 

Negatives:

- Even with increased sales, the profit is minimal, FCF is minimal.

- They got rid of fabs. As fabless they should have huge margins. They don't.

- CPU fight is still very tough. Intel can just bury them with price war.

- GPU fight is still very tough. Nvidia can just bury them with price war.

- AI/GPU is Nvidia's domain so far. I don't see AMD making big inroads.

- Bitcoin mining sales can dive if mining dives or goes spec-chips (I thought it already went spec in the past, maybe it's just new maniars who use AMD GPUs...)

- If there's PC/server downturn, AMD will lose CPU sales and go to losses again.

 

In general, I still think negatives outweigh the positives. OTOH, it's still quite cheap on P/S basis vs INTC and especially NVDA. Theoretically, if someone could drive AMD to take a chunk of AI/GPU space, they could explode up. That's before or after being acquired...

 

Thoughts?

 

I could be wrong, but I think most (all?) Bitcoin mining is done with ASICs now.  I think the GPUs are being used for the other cryptos of which there are now hundreds.

 

[Liberty]

Yeah, I think the GPUs are mostly for Ethereum and its variants now. Bitcoin is on ASICs.

[mwtorock]

AMD's future is going to rely on getting market share in server sector in 2018. Server chip adoption cycle is longer than PC. From what I read, it is actually a positive outlook for 2018. However, the valuation is not really as cheap as it was in early 2016.

[fareastwarriors]

 

AMD said to be in advanced talks to buy Xilinx in over $30 billion deal

 

https://www.cnbc.com/2020/10/09/amd-said-to-be-in-advanced-talks-to-buy-xilinx-in-over-30-billion-deal-.html

[fareastwarriors]

AMD to buy chip peer Xilinx for $35 billion in data center push

 

https://www.cnbc.com/2020/10/27/amd-to-buy-chip-peer-xilinx-for-35-billion-in-data-center-push.html

 

 

Under the deal, Xilinx shareholders will receive about 1.7 shares of AMD common stock for each share of Xilinx common stock, valuing Xilinx at $143 per share, or about 24.8% higher than its $114.55 closing price on Oct. 26. AMD shareholders will own about 74% of the combined firm, with Xilinx shareholders owning the remaining 26%.