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Not at those levels, and I think, post-CC, they got the message regarding investor opinion on those bonuses
I hope you are right. $50M/quarter is another $.44/share/year. At a p/e of 25 that is about $11 negative influence on the share price.
edited to update numbers for year instead of quarter
If the bonus and the losses from Spansion weren't subtracted from Q3, They would have made more than $0.40 a share last quarter.
I agree if the bonus was removed that would be a big change, but they explicitly said in the conference call that these expenses will continue every quarter, so we cannot ignore them.
As for Spansion loss, after you adjust for the minority interest, the difference would have been only $30M to net income. That is only another 7 cents. So without Spansion loss, Q3 earnings would have been $.25/share. And remember after IPO, AMD will still have to take an adjustment for 40% of Spansion's losses as they will still be a large owner. I expect Spansion to be close to break even this quarter though.
So I expect Q4 to be in the $.35/share range. Expenses are going up (R&D and MG&A), which is going to keep earnings in check.
Where can AMD go if even its forward-looking P/E is 33?
You should note the 2006 estimates have been steadily climbing over the past 6 months. I expect they will continue to be revised upwards, especially after the Q4 report. AMD might be able to make $1.50/share or more next year, so there is plenty of upside left in the stock.
PC Gamer Alienware Ads.
Alienware has had a prominent ad in PC Gamer for years now. Before the holiday issue, this has always been Intel based systems and the ad features the intel inside logo. It is a 2 page affair with a laptop on the left and a desktop on the right. In the holiday issue, for the first time ever, the desktop system featured was an Athlon XP64 system. The laptop was still Intel. No Intel Inside logo anywhere. Well in the Janaury issue that is just out to subscribers, both systems are AMD. The only hardware advertiser that still pushes Intel in their ads to gamers in this magazine is Dell. All the rest prominently feature AMD.
Another new thing in this January issue is an Intel ad, pumping the P4EE as the chip to have for Battlefield 2. Intel must have found nobody was pushing their stuff anymore, so they decided to take an ad out for themselves.
If you take a PC Gamer from 3 years ago and compare it to one today, it is really an amazing transition from Intel to AMD in the ads and recommendations in the hardware section.
Conroe is slightly constrained at 65W,
Why is Intel constraining their next gen desktop part to 65W? The competition is doing 90W in this arena. I understand the advantage of doing so in mobile and server, but desktop? It seems to get the highest performing gaming chip, they should open this up and see how high they can clock it. My thought on this is the new core is simply not power limited/constrained at all. At the highest frequency they can muster at the highest voltage their process can tolerate, it still uses less than 65W. That theory doesn't really explain 80W Woodcrest though.
I guess Intel is simply going for performance per watt, and not overall performance, or they simply hit one out of the park and achieved both all under 65W. If Intel didn't think they could have the highest performing desktop chip at 65W TDP, they would have specified it at a higher TDP, since nobody in the industry is really pushing for a 65W TDP for desktop. 90W with a lower power idle is sufficient. That is what makes me wonder about my AMD investment. The specs seem to lead to Intel confidence in their next gen cores.
I don't think anybody outside of INTC knows right now.
wbmw and other posters with Intel contacts sound pretty confident in this next gen core (although they sounded confident in the pre-Prescott days as well), so I was wondering how much had been publicly said. I saw the IPF slides, and that wasn't terribly impressive to me because of the lack of details.
I'm wondering why sites like Tom's say it is 'expected' that Intel will regain the performance crown, when I have seen little public evidence to back that up, and Intel is so far from the performance crown today, except in mobile. I know it is too early for this stuff, but these cores are getting a lot of press lately.
So I guess until I see something concrete, I'm holding my AMD stock. It seems like the prehype might start taking a toll though. If I sound slightly nervous, I am. I hold a ridiculous position in AMD compared to the rest of my portfolio, and I should probably just lighten up some after a wonderful gain. I just hate to give up on my best performing stock. It seems like if Intel doesn't come through with their next gen cores, AMD has a chance to hit $75 or higher in a couple of years when Fab 36 is running full out.
Well I'll be impressed if Merom/Conroe/Woodcrest can get over 3Ghz given Yonah is not anywhere close to that now. If they do, I think they'll be very well positioned. It certainly looks like they will have an IPC advantage over A64/Opteron. I don't expect A64/Opteron to be higher than 3.2Ghz by this time next year. Has Intel said anything about expected speeds out of the new cores?
As far as the 4th pipe goes, it is going to be hard to utilize it except in tuned benchmarks. I guess you can argue that is all that matters because that is what gets played up by each company. Typical applications won't use that 4th pipe much.
Keith - when are you planning on exiting AMD stock?
I do think there will be some amount of hype going into Intel's launch of next gen. cores that could hurt the stock, so I may look for an exit and buy back on a major dip. I expect Intel's products won't live up to the hype, but will be quite good compared to Intel's current products. If they do live up to the hype, well my AMD investments will return 100% instead of 200%. I can live with that. I'm just not quite sure how much the hype is going to hurt AMD stock at this point. I would really like to hold on to it for another year.
It will be interesting to see if this expectation turns out to be true.
We heard similar claims before Prescott came out. It was to be the performance leader. Look how that played out.
I believe Merom/Conroe/Woodcrest will be performance per watt leader when compared at the same frequency to A64/Opteron, but I believe it will lag A64 in frequency and overall performance.
If I'm wrong, I'll simply sell my AMD stock at that time. No need to get worried now about something that is 7-9 months away.
I see AMD is still up to its wafer yield vs production
volume tricks
Wafer yield has to be pretty good. AMD shipped more than 11 million highly competitive processors in Q3 out of one little dinky 200mm fab on 90nm tech. At 5000 wafers/week, that is about 170 processors on average per 200mm wafer.
AMD always goes down in response to a good CC.
But this time it's different! :)
I don't know how many times I have thought that, and I always regret it, yet I find myself thinking it again.
So tell us about K10.
I know no more than the collective of the board here knows. AMD has not talked about it at all, so who knows. That might mean they are not even close to having a next-gen cpu, or it might mean they are being tight lipped. One thing for sure is they have not been sitting around doing nothing for the last 3 years.
The FUD is all the talk about AMD decimating Intel.
If AMD continues to take marketshare from Intel, what is going to happen to Intel stock? Intel the corporation will be fine. They have gobs of cash and will continue to post profits. Intel the stock, however, might not do so well.
Secondly, there is *no way* AMD is going to compete with Intel if they don't offer 65nm production. Get it? They *have* to do it.
As it is today, AMDs 90nm is looking pretty healthy. Seems like they will be able to compete fairly well against Intel's 65nm lineup, at least until Q3 of next year. If it starts looking grim for AMD, and there will be plenty of warning, I'll have no problem exiting my position. I'm not married to it.
Third, the incremental performance that AMD has today and the incremental performance that Intel had last "leap" means nothing to the average consumer
Any way you spin it, AMD is taking marketshare away from Intel at a good rate.
Fourth, Intel marketing machine war chest of $300M is about 8 weeks from exploding. People will hear that.
Agreed. AMD can't compete with Intel's marketing.
You need to get a grip on reality, you're listening to too much FUD.
My post was just pointing out AMD is working on a next gen micro-architecture too. How is that FUD? Alot of pro-Intel posters around here seem to think AMD is not a moving target.
If Intel spent the last several years on a brand new micro-architecture
You do realize AMD is also working on a new micro-architecture, don't you? AMD has not been sitting still since k8 originally appeared several years ago.
So don't get your hopes up too high. If Intel nails Conroe, Woodcrest, and Merom, which I'll admit looks promising given their early demo in August, they may pull back to performance parity or even jump ahead for a short time at the end of next year. AMD could be close behind with another leap of their own.
If Intel messes up Conroe, Woodcrest, and Merom in any way, they are in big trouble. This is their last hope. I hope for your sake you have hedged your bets. AMD will be able to supply a significant market share at the exit of 2006 with the combination of Fab30, Fab36, and Chartered, and that could put a serious dent in Intel if they haven't improved their lineup.
Good luck to you in any case.
"while AMD might run to 30" - I don't know which way the speculators will take the stock, and I don't really care. They may take the stock to $30, or it may have already hit its peak. I'm investing in INTC because it's based on a company already well valued with plenty of prospects for the future.
Then why are you one of the top posters on this board? This is an AMD investment board.
As for me, I have posted in the past and I have quietly been holding AMD. I'm looking for an exit sometime in Q4. I do think AMD may have a little trouble late next year as Intel's 65nm products based on the "good" core come out. I don't doubt AMD will still remain somewhat competitive, but I just see a peak in the stock sometime in Q4/Q1 in the face of more competition. I think AMD has made enough inroads in the server space that it has momentum that will continue even if the competition heats up.
I don't believe AMD has the resources to staff layout teams to update the layouts of all their different brands each time they do a stepping or process change. I think Turion shares the same layout - and thus the same transistors - as E-step Opteron and Athlon 64 parts, and that they achieve their lower TDP numbers by virtue of lower frequency and voltage, as well as leakage binning from the manufacturing lots.
Transistors are different, but who said anything about requiring extra layout staff? There are numerous tweaks to transistors that can be done automatically through various tools on a speed optimized design to produce a more power friendly design, all with minimal design effort. I think Intel uses this strategy on some of their parts as well. Start with 1 base design, and produce 2 silicon revisions from it, 1 optimized for speed, 1 for power. I think I read an Intel paper on this. If I can find it, I will post it.
Wrong. AMD isn't diverging on two different cores, Doug.
Well I'm jumping in a day late and in the middle of the argument, but the Turion and regular A64 are different silicon revisions. The transistors are tweaked on the Turion to optimize for power instead of frequency.
edit ... I see others have already provided links to the above point. I have a hard time keeping up with this board sometimes...
Interestingly, they downgraded AMD to hold just a month ago.
And right before that Tad had initiated coverage with a buy. I forget the original target. He is playing the short term trends, which is surprising thing for an analyst to do.
12-Nov-04 Wells Fargo Sec Initiated Buy
7-Dec-04 Wells Fargo Sec Downgrade Buy Hold
5-Jan-05 Wells Fargo Sec Upgrade Hold Buy
The period from now UNTIL earnings day has a good positive bias over the past 6 years.
Thanks for the interesting data. But this time its going to be different! (in the droid spirit).
Seriously - I would like to buy some sort of long position even after just selling a huge one, because it does usually run up into Q4 earnings. I'm going to do a delayed roll to take advantage of this pullback. I think I will buy a smaller number of Jan $25 or Jan $30 calls (or possibly Aprils), and keep the rest for cash and have a really nice Christmas.
Well I sold all of my trading position today at $24.90. A bunch of shares and a load of Jan $15 calls.
Thanks. I actually believe AMD is going to make more than $.25 in Q4. In fact I think it is going to be around $.30. So waiting for after Q4 earnings to buy more may not be a good idea.
This is purely for my trading account. I hold another long term position in AMD I don't plan on selling until Q1 06 at the earliest.
I think what I will do is buy some April call options in another week or two after things settle down. I think we will get another run up in Q1, and I would like to capitalize on it. I will, however, only risk a small portion of what I just made.
Well I sold all of my trading position today at $24.90. A bunch of shares and a load of Jan $15 calls.
Well dang I'm looking like a genius for selling at $24.90, but I assure you it was dumb luck.
Now I'm looking to buy back in some shares or leaps as I consider this a significant pullback. Anyone have a good feel for how much more AMD will pull back? I'm thinking around $21. Maybe I'll write some puts. I want to see if this downtrend settles out first though.
Well I sold all of my trading position today at $24.90. A bunch of shares and a load of Jan $15 calls. The Jan $15 calls were bought at $.50 in august, and this was my biggest single investment gain both dollar and percentage wise in my life. $.50 -> $9.90!!! 1980%! I can't imagine what I would have done if I had rolled up the calls as it went up, but I was too lazy to do that, and I certainly can't complain.
It isn't that I don't think AMD will go higher. It is that I just had to take some off the table. I was sitting on an amazing gain in a short period, and it was time to take a profit.
I still have a lot of long term holding shares. I don't expect to part with those for at least a year. Hopefully in the $40s or $50s.
Good luck to all - I'm done trading AMD stock and options for a while unless there is a good pull back. That doesn't seem likely.
It's not the holiday season that worries me...its the outlook for Quarter 1 and 2 for 05'
My feeling is AMD is picking up some business wins, which might help Q1 and Q2.
My only worry is flash, which I think just about everyone shares. The CPU division appears primed and ready for some serious business and profits.
If only the 2 divisions aligned in success. It always seems to be one or the other.
I'm happy to take my profits now and wait for the next lull.
I won't argue with you there because it is never bad to take a profit, but I just don't think you'll see $15 again. $18 maybe. Even that is doubtful in my mind based on the large volume days that pushed the stock over $20. There is suddenly a large support base above $18. Something pretty bad would have to happen to make it go back to $15. We're entering what will likely be a good holiday season for the market.
Also, how do you think the stock would react if AMD earned $.30/share in Q4? $.35? Or if they announce good forward guidance for Q1? I think these are all possible. There may be a short term pullback, but I don't think I would want to risk being out of the stock right now. I'm glad you made a profit. I just think there is more to be made on the long side. I think we'll see at least $30 by the end of Q1.
I will reconsider entry when the price returns to $15. My guess is that it will be here by March.
I think the only way you'll see $15 again is if there is a stock split. Next year is looking strong for AMD, even if flash performs poorly.
You might consider writing puts to reestablish a long position. Pick a strike price slightly below the current price, and write for a month out. Keep doing that month after month until you get assigned, and if you don't, you get to keep some cash. You can also buy a lower strike put if you want some insurance from a major drop. This would minimize the risk.
you are promoting a company that has not registered with the SEC?
I am not HellraiserDK. I was pointing out what he was doing. Take some time to read posts next time.
The upgrade was HRDK inc. (HellraiserDK). It was a personal upgrade. A joke, but I sure thought for a second some analyst finally got it. No such luck.
Short interest date. I did a little more digging. The 15th reflects the settlement date.
New York Stock Exchange Issues Monthly Short Interest Report
19-Nov-04
The New York Stock Exchange today reported short interest as of the close of business on the settlement date of Nov. 15, 2004 reflecting transactions through Nov. 9.
www.exchange-handbook.co.uk/news_story.cfm?id=50127
I guess we won't know until next month how much of this rally was more short covering.
Short interest
Down to 51.5M short which must have helped the rally we just went through.
So the short interest is down significantly. I believe this data is collected on the 15th of the month from the brokerages. The last several days of trading:
11/10 17.29 9,256,300
11/11 18.59 20,171,700
11/12 21.01 39,785,200
11/15 20.98 21,423,400
11/16 20.88 13,804,500
11/17 21.99 22,708,600
11/18 21.96 11,874,100
11/19 20.81 13,877,900
So the 12th was probably a major short covering rally. I'm not sure if the data is collected before or after the close of the 15th.
Based on this lower short interest, I think if AMD heads down on monday some shorts might jump back on it and push it down more. Monday would be the 3rd down day in a row and could be a signal to traders that the momentum upwards has halted for a bit. I would like to see a bounce back up, but I am not confident of this happening this week.
I expect the 2 weeks after Thanksgiving, however, to be very kind to the markets in general. I think AMD will make new highs then regardless of any pullback this coming week. I would like to be wrong because I don't plan on trading in and out, and I hate watching my worth fluctuate so violently. I'm currently long shares (avg cost $12.27) and Jan $15 calls (avg cost $.51). Amazingly I was also short Nov $13 puts. It is hard to believe the stock is over $20 only a month and a week after I wrote them for a good price. I am trying to figure out an exit point for the calls. I'm thinking in about 2-3 weeks. Anyone have any thoughts on exiting Jan call positions? I have considered selling all and rolling some money into higher strike Aprils. Perhaps I will dump the Jan's first thing monday, wait for any possible pullback, and buy some higher strike April's.
Size and Weight: 13.98x10.04"x1.18", 6.2lbs
My only complaint is the weight of this one. If they offered this same notebook in a smaller form factor, I would be interested. The ability to play movies without having to boot up is a very nice feature. I would be willing to sacrifice screen area and battery life to get a smaller and lighter notebook.
This notebook does stack up nicely against the other ones in retail though.
last few LaFountain postings on SI:
http://www.siliconinvestor.com/readmsg.aspx?msgid=18664904
http://www.siliconinvestor.com/readmsg.aspx?msgid=13808525
http://www.siliconinvestor.com/readmsg.aspx?msgid=13471910
He is probably not allowed to post again now that he is an analyst again.
Interesting he is also the one who just put the 'sell' rating on INTC with target of $15.50. He never did think Intel had a viable monopoly that could be sustained.
Wells Fargo Report-
Hey did anyone else notice this:
Wells Fargo Securities NOVEMBER 12, 2004
SEMICONDUCTOR MANUFACTURERS
Initiation of Coverage
Advanced Micro Devices, Inc. – Buy (AMD $18.59)
Initiating Coverage with Buy Rating and $27 Price Target
A. A. (Tad) LaFountain, III
212-805-1673
tad.lafountain@wellsfargo.com
Tad was big on AMD a few years back, and then he appeared to get out of the analyst business as far as I can tell. It looks like he is back and bold again. He used to even post on SI.
p.s. thanks Buggi for these reports. It is greatly appreciated.
Then, you say you "would aggressively buy back though if I stopped out, as I believe AMD is a long term screaming buy."
Let me rephrase. I would enter an aggressive accumulation period by writing puts over a period of months until I got assigned shares to reestablish the same position at a lower average cost than my original position.
Is that more clear?
Sure I might only gain a dollar or two lower cost, but it is worth it to me. Commissions are not a factor here.
There is the potential danger that I never get reassigned the shares and miss out on a large run up, but I would still make some $$$ either way. AMD fluctuates so much I'm not too worried about this strategy. There always seems to be opportunities to buy or get assigned more shares.
You dangle that big cherry in front of those guys and they're going to take a byte out of it.
This is why I never put in a stop limit order, but I still do them mentally. I set a price in my head, and when it gets close to that I watch the stock closely.
The only problem with this is I don't always follow through, and then I often regret that I didn't sell because the momentum has switched and the stock heads down more.
I have a mental stop loss right now of $19. I would aggressively buy back though if I stopped out, as I believe AMD is a long term screaming buy.
Given the # of shares that have traded hands above $19, I don't think I'll see my stop loss anytime soon.
Like I just said go listen to the CC
Yes I will this weekend. It obviously went well. I would imagine analysts will have things to say about it next week. Hopefully a couple more upgrades.
I'm tired after watching the chart all day...signing off.
The last 2 days of trading are insane. This run up has to stop sometime and take a breather, right? It looks like it is going to run right into market close and probably continue Monday. I guess that is what 32M shares traded can do for you. I didn't expect $20 to be overcome so quickly. I'm certainly not complaining (holding a lot of shares and Jan $15 calls purchased way back). I'm just wondering if I should lighten my load and try to play a pullback. Then again maybe I should fasten my seatbelt and hold on for the rest of the ride. Are you all in for the long term, or looking for an exit?
I have put up a page with links to the webcast slides here:
Wow your site is looking really slick and contains a lot of good info. Thanks for the slides.
But the weakness they report about/predict is explicitly in the retail consumer desktop space, even HP and eMachines are mentioned. Hard to describe AMD´s main area of strength (and sales volumes) more precisely.
AMD mentioned in the last conference call that retail consumer desktop sales account for much less of their volume than it has historically. Also, October is the weakest month for retail in Q4. November and December should be much better.
Anyone play options in this?
Yes. I have some Jan $15 calls. I'm sitting on a triple as I bought them a while back at $.50. I already covered my costs on these when I was at a double. I'll probably hold the rest until expiration. I can do no worse than break even. This time of year is a historically good time to be holding options in AMD. The majority of my holding is stock though. Options are a nice side play when the momentum is right.