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  1. #1
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    AMD's stock is a-surging

    Many analysts are expecting several good quarters for AMD since its Opteron is doing so well. The stock is moving up since this morning.

    This is good news. AMD has had too many quarters with average cpu prices just over $100. They are now selling great numbers of cpu's with prices of $750-$2200; I think the results this quarter are going to be pretty good, and I think the stock will go up quite a bit more.
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  2. #2
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  3. #3
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    Angry STOCK PRICE

    Did you see the price today?

    http://moneycentral.msn.com/scripts/...lqd&Symbol=AMD

    There could be some money to be made but be cautious. I was going to buy last week and my stockbroker talked me out of it.

    I would have bought a couple grand and tomorrow if it went up again sold half and bought safe stock with the proceeds. I'd let the rest ride till 64 plays it cards. Nice. Wish I had more money!

    I hate stock.

  4. #4
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    I bought YESTERDAY
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    Stock

    What is your plan?

    When are you going to take profits?

    This isn't going to be a long term holding is it?

    You might make some money. I am curious why it went up so much and what will happen tomorrow.

  6. #6
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    Be cautious is right. You'll notice quite a few tech stocks are doing well, so a lowball stock such as AMD would get a nice boost, face it about 9 cents is 1%, so it can get a good percentage kick based on anyother manufacturers good news or just a good general tech run up. What matters here is revenue, and AMD is NOT expected to be in the black for several MORE quarters, the Opteron has only slightly positively impacted the downtrend AMD has been suffering from.

    The same "positive" effect hit the stock when the Opteron was released but AMD put traders and anaylists BACK to square one when they announced their Q2 "earnings", sure it can be argued about the technology, etc... But what counts is AMD is NOT taking any market share from Intel further they just cannot seem to turn into a positive revenue stream. Most agree that AMD is a viable threat but just don't see Intel losing any market share as well. However, the stock should run up a bit just before (and possibly) after the A64 hits the shelves, if I were a stock broker I'd ask what the length of investment would be, if short term (1 to 2 quarters) I'd say buy it, beyond 2 quarters I'd advise against it.
    Last edited by Nobody1; 08-18-2003 at 11:31 PM.

  7. #7
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    there have been a lot of positive announcements in the past 2 days. yesterday the barron's report called opteron/a64 "the greatest threat intel has ever faced" and today a bunch of workstation software companies annouced support for the athlon64/opteron.

    I think it's quite possible that amd could have a good quarter. the los alamos job counts in this one, because the install is in october. when you sell thousands of chips @$2200 vs. $120, things can change.
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  8. #8
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    Originally posted by steven975
    there have been a lot of positive announcements in the past 2 days. yesterday the barron's report called opteron/a64 "the greatest threat intel has ever faced" and today a bunch of workstation software companies annouced support for the athlon64/opteron.

    I think it's quite possible that amd could have a good quarter. the los alamos job counts in this one, because the install is in october. when you sell thousands of chips @$2200 vs. $120, things can change.
    Announcements are words, AMD needs more than words and they need the consumer end of the s/w industry to be the type of threat that has been relayed by such articles, that just isn't happening (yet). This has been said before at the launch of the Athlon, nothing has really changed (market-wise), tea leaves don't translate to revenue.

    True. But they still are recovering their R&D on the Opteron, I'm sure IBM helping in fab does offset that by a considerable margin though, they would still need to capture a good chunk of the market to turn revenue from red to black.

  9. #9
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    The development costs of the opteron and athlon64 have already been recuperated, at least from an accounting standpoint, because R&D is expensed, not amortized. While most economists believe that R&D should be amortized over the term of the product's life, current accounting rules don't allow it.

    So, you could say the Athlon paid for the development of the Opteron. Of course, AMD will still be doing research on the next thing. I think A64 is one of the biggest jumps in technology, so I think the results will be better for AMD than the Athlon has been.

    Now, when joe 6-pack walks into best buy and sees a 64bit pc, he may decide to get that, instead. Also, a bunch of sales drones there actually push athlons!

    the announcements ARE just words, but it shows people jumping into support the opteron. It's the chicken and egg thing, i know, but it looks like the egg is definitely starting to show up, hopefully letting the bigger chickens jump in as well.
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  10. #10
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    I understand your point (ALL are valid), however, the Athlon's sales have had a NEGATIVE effect on profits, hence R&D for the Opteron/A64 hasn't occured.

    As for the salesperson scenario, AMD does not have an OEM presence to speak of, and Intel undercuts EVERYTHING AMD sells when talking OEM channels, I find it hard to see that scenario, as Intel will likely cut OEM prices at the time of the A64's release, it won't even be a dog fight, Intel, because of a positive revenue stream and CASH on hand can afford to do the above for quite some time before and after the A64's release, they could in reality bleed AMD to the point where AMD breaks, though I doubt they would, though they may push them to the brink before easing off a bit.

  11. #11
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    R&D for the opteron/A64 HAS occured! If not, there would be no chip. It has been expensed already; Opteron/A64 R&D has contributed to some of AMD's losses in a way...plus AMD's losses in the past quarters will result in tax breaks for AMD in their first few profitable quarters!

    As far as financials are concerned, Opteron/A64 R&D has already been done. It has been expensed over at least the last 2 years.

    Intel has been sqeezing AMD to the brink since the Athlon came out. They could do worse, but not much.

    Since intel is publicly owned, pricing at/below costs would kill the financial results for Intel and have all their execs fired. That's the downfall of public companies...you must plan for the QUARTER, not the long term.
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  12. #12
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    Also, if Intel strarts selling their processors at a loss, they are open to litigation for anti-trust violations (predatory pricing).
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  13. #13
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    Originally posted by steven975
    R&D for the opteron/A64 HAS occured! If not, there would be no chip. It has been expensed already; Opteron/A64 R&D has contributed to some of AMD's losses in a way...plus AMD's losses in the past quarters will result in tax breaks for AMD in their first few profitable quarters!

    As far as financials are concerned, Opteron/A64 R&D has already been done. It has been expensed over at least the last 2 years.

    Intel has been sqeezing AMD to the brink since the Athlon came out. They could do worse, but not much.

    Since intel is publicly owned, pricing at/below costs would kill the financial results for Intel and have all their execs fired. That's the downfall of public companies...you must plan for the QUARTER, not the long term.
    AMD's processor division has had a negative revenue stream, as a whole the Athlon has not made any revenue, it did report profits intially, but the stream of negative quarters have obliterated any earnings from that divison. If any recovery of R&D had occured it would come from other divisions such as flash memory, and because they're publicly traded, AMD stock holders see that the processor division has NEVER recovered R&D costs of the Opteron/A64, though diverting profit from one division to another is not cooking the books, for the stockholder it may as well be as that effects their dividends, do you know what AMD's dividends would've been if you remove the processor division? That points to a poorly run division and/or bad management at the top.

    As for Intel pricing at or below costs, I doubt it, they have plenty of wiggle room.

    Intel does have their "bad revenue" processor with the Itanium, and they have done the same thing AMD has done with the Opteron/A64 by diverting profits to cover it's R&D, Intel stock has suffered from that blunder, I think AMD has it's Itanium with the Opteron/A64, but we will know for certain in the next 2Q's, that is for sure.

    REALITY:
    http://biz.yahoo.com/z/a/a/amd.html

    AMD's recommendation is a HOLD/SELL split opinion ~50-50, it's 1yr EPS is $7.42, that would be ~$2.00 BELOW where it is today, if you had tracked the EPS of the stock since 2000, you'll note that the stock performance falls in line with it showing little variance, AMD's fiscal performance has been NEGATIVE all year, and has been for quite some time. What is seen today is a sector driven rise in their stock.
    Last edited by Nobody1; 08-20-2003 at 03:43 PM.

  14. #14
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    Oh, everyone here knows AMD has been in the red for some time.

    Also, there are many tech analysts (read: not brokerage house poster boys) that are bullish on the opteron and A64 (you know, people that actually UNDERSTAND the companies they look at). I take "stock analyst" ratings with a grain of salt. I know they try, but they don't know nearly as much as they think they do; they're too focused on past performance and often fail to take non-finacial issues into their analyses, because there's no way to quantify it and if they did it would be arbitrary...and the finacial world frowns on that.

    AMD obviously does not have their Itanium with the opteron...in 3 months it has outsold the itanium 1 and 2 over the life of the product. I know some people here say 64bit isn't important, but I'm gonna bet that the majority of the ignorant buying public will think it does. THAT is what matters; it is what will drive the success of A64. Intel has prayed on consumer ignorance for ages, why can't AMD.

    I do understand your argument about the use of flash and other profits to fuel processor research and I agree that it does not paint an accurate ECONOMIC picture of the company, BUT the rules are the rules...and GAAP is what they are. I am an economist myself, and I'm all for financials that paint a better picture, but that's not the way it is.
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  15. #15
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    Originally posted by steven975
    Oh, everyone here knows AMD has been in the red for some time.

    Also, there are many tech analysts (read: not brokerage house poster boys) that are bullish on the opteron and A64 (you know, people that actually UNDERSTAND the companies they look at). I take "stock analyst" ratings with a grain of salt. I know they try, but they don't know nearly as much as they think they do; they're too focused on past performance and often fail to take non-finacial issues into their analyses, because there's no way to quantify it and if they did it would be arbitrary...and the finacial world frowns on that.

    AMD obviously does not have their Itanium with the opteron...in 3 months it has outsold the itanium 1 and 2 over the life of the product. I know some people here say 64bit isn't important, but I'm gonna bet that the majority of the ignorant buying public will think it does. THAT is what matters; it is what will drive the success of A64. Intel has prayed on consumer ignorance for ages, why can't AMD.

    I do understand your argument about the use of flash and other profits to fuel processor research and I agree that it does not paint an accurate ECONOMIC picture of the company, BUT the rules are the rules...and GAAP is what they are. I am an economist myself, and I'm all for financials that paint a better picture, but that's not the way it is.
    Good points.

    Tech's had that same bullish feeling for the Athlon, and at the end of it's era what has changed for AMD marketwise -- not much if at all.

    Yes selling a new technology does have a good ring to it, but Apple has proven that remaining status quo, and even failure to that end, by the same token the ignorant consumer can question the sales rep on name recognition and demand Intel.

    Yes, the new rules are almost absurd, but needed in the face of corperate collapses recently. BTW, I'm not knocking AMD on diverting profits outside of it's processor division to cover expenditure developing processors, I'm just pointing out that the monies were recovered elsewhere, and that did have an impact on it's stock, if they were to jointly develope Opteron/A64's with IBM by not paying IBM to produce the chips, rather split costs and profits, I'd bet AMD would triple in price, and justly so, as I'm sure IBM does have it's weight in OEM markets, I just don't see AMD getting there by themselves following their present strategy.

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