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Silent Bob:
1. If earnings are between 0.15 and 0.20 I do not think this would be enough to disrupt the pattern even though they would be "blowout" numbers for a 2Q.
2. If we got those numbers and forward guidance was extremely strong and specific and credible they might - but I doubt this will happen.
3. I think that certain aggressive institutions will be counting on the usual pre-earnings run up and will not be willing to risk that profit by holding after earnings. Some of them will sell before the end of June to improve the end of quarter accounts, and then buy and sell again, in smaller quantitites, before earnings two weeks later.
4. There is an army of small traders who have also done well following this pattern. They get dragged along by the June rise and even if it dips, as the instutions sell before the end of June, they will go on buying or at least hold until the July earnings announcement.
5. The question is what would make them hold after the announcement? There are a number of potential product, partner, alliance and market research announcements in June and July (not to mention August and September). It could be argued that these will trigger the move up to a new trading range and those who have divested in the earnings period will be left behind.
There is a fundamental argument that a significant rise in the stock price is inevitable in the next 3-6 months. Historical precedents can be found to support the concept of a July-September start to such a change in status. This might be because the market anticipates profits about 6 months in advance and by July it might be very obvious that AMD earnings in January 2005 will justify a stock price of $30-50 based on the industry average forward looking p/e multiplier.
6. The sell-off after 4Q earnings was immediate in the AH. In 1Q the price held (although there had been a mild sell-off before the announcement). But, the sell-off followed in a day or two.
My reading is that in 1Q more institutions and small investors than in 4Q waited to see if the factors in 5, above would apply. In other words they were less confident that they would not apply. But AMD guidance was not very strong and when the erosion started the herd turned and ran.
7. In 2Q I expect the hesitation to be more pronounced. Earnings will be blow-out (15-20 cents). Forward guidance will be positive but guarded and not very specific. Analysts will be indecisive - saying that the good news is fully reflected in the current share price, but conceding grudgingly that things are improving. So the decision to sell will be more problematic but in the end the sellers will sell and not enough longs will emerge to overwhelm them. The longs will also be waiting for the post-earnings sell-off.
8. My best guess is that the move up to a new trading range in the stock price, will start as a pre-earnings rally in the second half of September.
9. There are a number of factors that could royally screw this and other scenarios. One is a possible earnings shortall warning from Intel, another is a major terrorist attack in the USA and another is a broad market correction. But these should have temporary effects on AMD. Of more lasting effect would be a DELL announcement to sell AMD and 2Q earnings in excess of 0.25 cents. These later two might trigger a price jump.
I think it needs close watching and I will not feel bound by the above guesses if hard news or my reading of the market convinces me to change my mind.
bobs10: It seems to me that much of the "market's" reservations about AMD relate to flash. The overhanging fear is that if demand falls (and there seems to be a belief that a fall is a cylical inevitability) the decline in AMD's profitability could be savage and sudden. A corollary fear is that Intel might start a price war in flash to regain market share and this would reduce AMD's margins.
These fears are revived from time to time when Samsung or one of the other big NAND suppliers announce price cuts or increased capacity. People seem not to distinguish too clearly between NAND and NOR.
Any suggestions that world economic recovery is faltering also revives the fears.
AMD's counter to this is to point to the increasing number of products that require flash. In addition, it talks about MirrorBit as being competitive with some NAND as well as bringing its own margin improvements even in traditonal NOR markets. All of this, it says, will improve profitability in the near term and prevent a return to losses even in future cyclical downturns.
But the "market" does not fully understand MirrorBit and because of this does not trust AMD's projections.
It is another case of wait and see.
Circle of Five
By Ed Sperling -- Electronic News, 5/28/2004
The challenges of end-to-end design are growing, and so are the number of companies that are getting involved in the overall design process.
The latest example is a circle of five companies calling themselves the Silicon Design Chain. You might think the group would be a mix of EDA companies, but it isn't. Among its ranks are Applied Materials, TSMC, ARM, Artisan Components and Cadence Design Systems, which is the token EDA company among the quintet..............
http://www.reed-electronics.com/semiconductor/article/CA421628?spacedesc=news
Not a Short: It was another case of the "sticky url" which I recently solved.
Signed
Sherlock Holmes.
Acer Ferrari 3200 Laptop Review
http://www.gizmodo.com/archives/acer-ferrari-3200-laptop-review-010031.php
EDIT: Another review another picture
Intel to ship 64-bit Prescotts on 1 August
http://www.theregister.com/2004/05/28/intel_64b_prescott/
bobs 10: The company announcements and journalistic comment from Taipai next week should create a positive buzz for the sector which might further unsettle the AMD shorts. But I would be wary of some profit-taking and consolidation if and when it gets to about $16.50 Following that we could reasonably expect a steady pre-earnings run the second half of June.
chipguy: Some dream about the future others about the past.
paul: If Keith's "around here" is to include SI, Yahoo and anywhere else that supports his thesis it would be possible to find a dreamer or two. I was talking about this board, which is where he made his post.
With relation to NiceGuy, I think it is unfair to refer to him as a dreamer. He makes the bull case consistently, which is at least as useful to have as the bear case which Keith implies sporadically whenever he is affected by the latest negative report from an analyst, journalist or market research firm. NiceGuy also keeps up with the discussion on here and SI, supports his case with reference to statistics, company and industry news and in his prognostications usually gives a minium and maximum range with appropriate qualifications. He usually acknowledges the opposing view. And his forecasts of revenues have been very accurate since I have been reading them (Q3 2003 to the present). His forecasts of earnings have been well within the norm on here and SI and others have been more optimistic than his. There is nothing in NiceGuy's analysis that I, and others, seriously disagree with except the timing of the increase in the stock price. And none of us have a privileged insight into that.
I don't recall any of the posts by factsnotfiction.
Keith: You continue to patronise. I am by now fully aware how it is your custom to parse your words when the accuracy or fairness of your posts are questioned. So I noted carefully, before I replied, how you had left yourself wriggle room with the word "some" and the phrase "around here".
If you would read my reply carefully you will see that I leave no room for doubt as to what I meant. I meant that nobody who posts on this board - whether defined as majority, minority, individual or "some" - fits your description of a dreamer.
Many of your secondary arguments are old hat around here so I will not respond to them.
AMD May Benefit From Intel's Woes
http://nwc.serverpipeline.com/showArticle.jhtml?articleID=21400053
Keith: We know what the revenues and earnings were for Q1 - records sales with earnings 200% better than most analysts expectations.
It is interesting to see how many Opterons were involved in that history. You may consider 31,184 boxes or so to be relatively insignificant but they were not insignificant for investors in AMD.
The rationale for the relatively conservative ramp of Opterons and Athlon 64, as well as some unplanned difficulties, have been exhaustively acknowledged, probed and discussed on here, so it is unfair to characterise the majority of posters as "dreamers". In fact, I cannot think of a single poster who fits that description.
HP and Sun, IBM and some of the whitebox makers did not get going on Opteron until well into the 1Q. The impact of their efforts is becoming more apparent in Q2 but their efforts will not be in top gear until 2H 2004.
Schaeffer's Option Activity Watch Features Advanced Micro Devices
Businesswire, Thursday, May 27, 2004 at 11:37
1. Advanced Micro Devices (NYSE:AMD) ranks number-two in PC microprocessors, behind its archrival Intel, according to Hoover's. The company is also a top maker of flash memory chips, which are key components of electronic devices including cellular phones. In addition, AMD makes embedded processors and other chips for communications and networking applications. Sentiment toward the security is rather mixed at the moment. In trading yesterday, open interest at the stock's July 15 put jumped by almost 2,000 contracts to 7,249. However, the equity's Schaeffer's put/call open interest ratio (SOIR) sits at a light 0.43, as calls (bullish bets) continue to outnumber puts (bearish bets) among near-term options. Furthermore, this reading is lower than 97 percent of all those taken over the past 12 months. Short sellers have flocked to the security, as the number of AMD shares sold short increased by 14 percent in May to 53.6 million - a new multi-year high. At the stock's average daily trading volume, it would take roughly five days to cover these bearish bets. Wall Street is skeptical as well, with 16 of the 25 analysts (or 64 percent) following AMD rate it a"hold"or worse.
Technically speaking, the stock has rebounded off key support at the 14 level and moved back above former resistance at its 10-day and 20-day moving averages. However, the equity is still battling resistance at its 10-week and 20-week trendlines in the 15.50 area. The security is also trading above support at its rising 10-month moving average. AMD has suffered only one monthly close below this trendline since April 2003. A continuation of the equity's rally could force investors to cover their bearish bets, adding to the rising buying pressure.
EDIT: If the stock keeps going up it will stop going down.
Forgot to mention I lifted the Lance Armstrong video from DARBES at SI.
A first-class video of one of AMD's sponsorship of Lance Armstrong - watch out for the "butt shot" at the end.
IMO it "Americanises" AMD and I don't how that would go down in France and Italy where cyclists are gods and racing a religion.
It would be nice to see an AMD product promotion of this quality.
http://www.nike.com/wearyellow/seelanceride/main.html
Petz: Who on SI wrote: Petz Thursday, May 27, 2004 12:22 PM
Respond to of 122468
re:<Intel EU probe> One thing I noticed is that Germany specifically said that putting any MHz requirements into specifications was just as illegal as specifying Intel processors, but I don't remember hearing that from other EU countries. Or was the German guy an EU representative"
The Germans simply repeated the EU Commission's directive. The directive specified that the name Intel and clock speeds should be removed from procurement specifications. France had already directed this as had some Scandanavian countries. The directives apply equally to all 25 EU countries.
mmoy: How about a "One of the Few" campaign featuring a US Marine-type motif. It could include compass, swiss army knife, and cyanide pill. The colour could be navy blue and gold if it's to be used at home, or battle-fatigue if used in the office. The carrying case could be made of jungle net with little bits of plastic twigs and leaves. For the "fully enhanced experience" face paint in earthy tones would be recommended.
mmoy: There's a cute little curiosity shop in Burlington Arcade that sells buy and sell signals.
The M-TECH D470K is a powerful, stylish and fully upgradeable 17-inch widescreen desktop replacement notebook based on AMD AthlonTM 64 processor. The model offers users 128MB DDR video memory with 8x AGP ATI Mobility Radeon 9700 graphics card and memory up to 2GB DDR400. The system is fully configurable with a choice of hard drive up to 60GB 7,200rpm or 80GB 5,400rpm, a choice of optical drive, such as: 24x COMBO or 2x Dual-DVD+R/RW (DVD Burner) and a standard 4-in-1 card reader (MMC/MS/MS PRO/SD). The D470K model uses the redesigned D470 case with modular bay for internal TV Tuner.
Innovation: fully upgradeable 17-inch widescreen AMD Athlon64 notebook
From $1600 +/- Estimated
D470K not yet available for delivery. Estimated time to ship - Late May
http://www.mtechlaptops.com/specifications/mtechd470k.htm
EDIT: Compared to the Ferrari, this one looks like it was designed by Roumanian engineers under Ceausescu's regime.
Acer's unveils new Ferrari and own-brand notebooks
[PC Pro] 14:38
Based on surging demand, Acer has launched the second version of its Ferrari-branded notebooks, alongside other mobile products.
David White, Acer's notebook manager said demand had outstripped supply three to one in some periods for the company's first laptop featuring the prancing horse badge
http://www.pcpro.co.uk/news/news_story.php?id=58351" target="_new">http://www.pcpro.co.uk/?http://www.pcpro.co.uk/news/news_story.php?id=58351
thanks to DARBES
EDIT: Given the success of Ferrari red maybe Avon should think of sponsoring a pink version.
The thick plottens.
Flash demand imbalance to correct in Q1 '05, says report
Silicon Strategies
05/26/2004, 11:05 AM ET
MONTEREY, Calif.--Demand will outstrip supply for flash memory through the fourth quarter of 2004, but the imbalance situation is expected to reverse itself in the first quarter of 2005, according to a report from Web-Feet Research on Wednesday (May 26).
The consecutive yearly demand bit growth rates for flash in 2004, 2005 and 2006 over 2003 are forecast to be 209 percent, 191 percent and 150 percent, respectively, according to Web-Feet. However, the current supply/demand imbalance will be as high as 15.7 percent for NAND-based 1-bit/cell components in Q2 '04 and as low as zero percent in Q4 '04, according to the Monterey-based research firm.
"As a result of the aggressive built-up of production capacity by the established players and the entry of new players that have significant manufacturing capacities and capabilities, the imbalance situation is forecast to reverse for all five groups of flash memory components as of Q1/2005," according to the Monterey-based research firm. The various flash-memory groups include floating gate, trapped charge, NOR, and NAND.
Analysts agree and disagree with the findings. RBC Capital Markets in San Francisco believes there will be an oversupply of NAND-based flash in 2005. Investment banking firm JPMorgan claims the NAND supply shortage will continue until the end 2005.
http://www.siliconstrategies.com/article/showArticle.jhtml?articleId=21100359&_r equestid=218768
Have you ever been up de Nile?
DARBES: It's heartening to know you have your addiction under control.
AMD targets low-end Athlon 64s at new markets
EDIT It's about Athlon 26000 and AMD's polivy of producing chips designed for emerging markets, such as India
http://www.theregister.co.uk/2004/05/27/amd_2600/
also
Cheapo Athlon 64 2600+ on way
Something happening next week, perhaps?
http://www.theinquirer.net/?article=16200
XP SP2 delayed until July
Longhorn work stops, SP2 the priority
http://www.theinquirer.net/?article=16198
AMD's 64-bits better than Intel's 64-bits - Microsoft
Cutler all over it, iAMD64
By INQUIRER staff: Thursday 27 May 2004, 06:24
A WIDE-RANGING interview with Microsoft senior VP Bob Muglia has revealed that the software giant believes not only that there are differences between iAMD64 and Intel's EM64T but that the former is better than the latter.
http://www.theinquirer.net/?article=16186
EDIT: This story is all over the net and even the Inquirer has it.
High-end servers to stave off low-end attack
Last modified: May 26, 2004, 3:36 PM PDT
By Stephen Shankland Staff Writer, CNET News.com
NEW YORK--Low-end servers linked tightly together will encroach on the turf of massive multiprocessor machines but won't replace them, server experts predicted on Wednesday.
More powerful networks and better database software have made groups of low-end servers better able to share a single database, but the technology still is immature, panelists speaking at the CeBit America trade show here said.
"The challenge there is really management. It's easier to manage a single operating system image than to manage a cluster of smaller nodes," said Jay Bretzmann, the manager of product marketing for IBM's Intel-based xSeries servers.
John Miller, the director of server marketing for Hewlett-Packard's Business-Critical Systems Organization, agreed, saying most customers with clustered databases are just dipping their toes in the technology with two-node groups.
"I think that the technology needs to evolve more...I don't think, if you look at the broader context, you're going to see a mass exodus from scale-up computing," Miller said, referring to the use of massive single systems.
There are some areas where the "scale out" approach--with numerous small systems--beats the "scale up" approach hands down, for tasks such as sending out streams of videos and hosting online games, for example, Bretzmann said.
But in terms of money spent, larger multiprocessor systems still dominate, said Mark Melenovsky, an analyst with research firm IDC. "While scale-out has gotten a lot of attention, more than half of spending is still on four-way or greater platforms," he said.
Oracle and Dell are loud advocates of clustered databases, with HP and IBM giving more qualified support.
The 64-bit question
Panelists also ventured other predictions about the future of servers at the show. One debate likely to fade quickly is about the need for 64-bit processors, which can gracefully accommodate more than 4GB of memory, Bretzmann predicted.
"I don't think we'll discuss this after 2004, because 64-bit computing will be ubiquitous," he said.
Chipmaker Advanced Micro Devices led the charge to 64-bit enhancements to the previously 32-bit "x86" chips, and Intel plans to follow suit by releasing its equivalent, the first Xeon model, in coming weeks. Intel also supports a separate, higher-end family of 64-bit chips--Itanium--which was codeveloped with HP but which has so far not been widely used.
Intel has said that Itanium and Xeon systems will cost the same by 2007, through the use of common hardware designs. However, HP's Miller was more cautious.
"Quite frankly, I think that's a little soon. But it does show what Intel's belief is," Miller said.
IDC in January lowered forecasts for sales of Itanium-based servers as a result of the arrival of 64-bit x86 chips.
Exercising utility
The CeBit America panelists also tackled the idea of utility computing-- .......... continued at link ..........
http://news.com.com/High-end+servers+to+stave+off+low-end+attack/2100-1010_3-522 1126.html
thanks to skeptically
AMD Holds Athlon 64 2600+ Chip in the Pockets
Entry-Level 64-bit Processor Waits its Time
by Anton Shilov
05/26/2004 / 04:01 PM
Advanced Micro Devices may have a yet another trump in its hands to fight low-cost Intel’s Pentium 4 “Prescott” microprocessors – an extremely affordable 64-bit Athlon 64 chip that still delivers respectable performance as well as something loads of customers are impatient to bite: 64-bit capability.................. ChannelTimes and AMDZone web-sites report that there is an even more affordable AMD64 chip coming in the way of the personal computer market: AMD Athlon 64 2600+. The latter should feature PGA754 packaging, 512KB of L2 and probably 1.60GHz clock-speed.
http://www.xbitlabs.com/news/cpu/display/20040526155902.html
"Gartner's Q1 server report without much detail:
While it does not lead in revenue, HP does lead in units shipped, moving 431,000 servers - 21 percent more than last year. Dell had the second highest volume at 344,00 - a stunning 38 percent rise. IBM came in third with 232,000 on a 27 percent increase, and Sun came in fourth with 77,000 servers shipped. The good news for Sun was that volumes rose 27 percent, which likely means some of its low-end bets are paying off.
http://www.theregister.co.uk/2004/05/26/gartner_servers_q104/
Taken verbatim from Joseph Halada on SI
mas: There are no limits to the depths of my humility, and I'm proud of it. I was taught by no less a person than Uriah Heep the 'umble servant of Master Copperfield.
AMD testing Socket 900 SOI chips?
http://www.theinquirer.net/?article=16179
Sun will be talking about Opterons, I assume.
http://www.sun.com/2004-0525/feature/
DARBES: With reference to your dull investment in AMD, I did read your SI profile and was glad to find another humble person. However, I think I am more humble than you. I am probably the most humble person in the world.
solds: Ruiz comments were to the effect that they were promoting Mirrorbit to customers and the take-up was dependent on customer preparedness to accept it. (These comments were, in my view, directed at those who had been suggesting that the slow ramp of Mirrobit was due to problems with design or process).
References to improved margins were mainly in the future.
However Mirrorbit was listed in a list of factors which yielded improved margins in Q1.
sgolds: Comments this year still imply that the adoption of Mirrorbit is entirely dependent on customer acceptance or ability to accommodate, and that was still relatively slow by 1Q earnings. I wonder what the issue is? I also understand that when a customer goes with Mirrorbit the original long term contract can be retired and a new contract with better prices for the customer and better margins for AMD can be negotiated.
Mirrorbit. AMD pronouncements suggest that what is holding Mirrorbit back is its certification by customers. Does anyone have a more profound understanding?
Advanced Micro Devices "market outperform"
Wednesday, May 26, 2004 9:05:51 AM ET
JMP Securities
http://www.newratings.com/new2/beta/article_426658.html
NEW YORK, May 26 (New Ratings) — Analyst Krishna Shankar of JMP Securities maintains his "market outperform" rating on Advanced Micro Devices, Inc (AMD.NYS). The target price is set to $20.
Shares of Advanced Micro Devices, a global semiconductors company, are currently trading at $14.92.
According to JMP Securities’ research note published this morning, Advanced Micro Devices is well positioned to benefit from the underlying trends favouring low-cost blade servers based on x86 processors. The analyst mentions that the company benefits considerably from its existing business relationships with IBM and Oracle. IBM and Oracle recently announced their decision to provide support for Advanced Micro Devices’ AMD64 processor architecture on the 64-bit Linux and Windows Server 2003 operating systems, JMP Securities says.
Advanced Micro Devices has introduced a new product range of low-cost Geode x86 processors for embedded applications, the analyst says. Advanced Micro Devices’ new embedded processors provide low power dissipation and have speed ratings in the range of 1 GHz-2 GHz, JMP Securities adds.
Advanced Micro Devices is poised for robust market share gains in the high-end mainframe and server solutions segment in the near term, the analyst believes.
JMP Securities maintains its "market outperform" rating on Advanced Micro Devices.
Appropirate p/e for AMD?
From the Smith Barney industry report
"Given that most semiconductor companies are now solidly profitable, we tend to favor P/E as the main valuation metric for semiconductor stocks. Looking at a list of the 40 top semiconductor stocks, semiconductor companies are trading at 27x forward earnings, essentially at the median of 26x forward earnings and below the median value of 34x. Our second favorite valuation metric would be P/S, currently at 4.44x, which is trading in-line with the average of 5.16x and median of 3.50x for the semi industry."
So AMD $45 on January 18th 2005?
sgolds: Certainly not euros!