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Interview with Hal Speed(really) marketing manager
http://www.lets-talk-computers.net/guests/amd/naming/
Oracle India Rides 64-bit Wave With AMD
From the Saxman on Yahoo. More proof that that AMD64 is growing by leaps and bounds.
http://www.financialexpress.com/fe_full_story.php?content_id=56363
Couple of things
Today was worse than the $.02 loss implies because the macro news raised the general markets. Without the good ISM report there would have been more of a correction.
Last week was a rocket. Every time that happens it brings out new sellers whose appreciation goals have been met. Actually today’s correction was very mild and bodes well for the rest of the week.
AMD is kind of in a holding pattern now. Most everyone that believes q1 will be good for AMD has bought in. AMD is a very polar stock with people either hating it or loving it.
People that believe q1 will not meet muster but think the AMD picture will improve over the year are holding for the dip.
There's a huge amount of $'s out there waiting for some confirmation that AMD is for real. Analysts are still saying AMD is dead. AMD needs to prove them wrong.
So far there have been indications that the king is ill. If it starts to look like the anti-biotic isn’t working the value of the prince in waiting could take a big jump.
It's all about relative value. I'm in no way turned off by high Beta stocks, in fact I like them because if you know what's happening you can position yourself to take advantage of the lack of knowledge of others. The problems is that there are few volatile stocks, unlike AMD, where you can find out the sort of information needed.
I follow about 25 tech stocks at any one time and AMD as well as M-Systems(Flsh) have been my big money makers since the big slide.
We're just starting the 5th year, let’s see what happens. I will give you that AMD has never come close to 30% market share, yet AMD still has had periods where it was extremely profitable.
AMD did very well for awhile before they started running into production problems. This has always been AMDs’ Achilles heel, at least until they got in bed with IBM.
If you had sold at anywhere near $45 post split and bought in at anywhere near $3 you wouldn't be here talking to me. Actually, I was selling and buying back all the way down because I expected a typical correction and didn't want to miss the usual 3 month, 30% rebound that was typical of corrections in the 90's. I got faked out because AMD, like a lot of other techs, fell 80+% instead of the usual 50% to 60%. Still I can't complain, I doubled the number of shares I had in the stock split and doubled them again by repeated selling and buying back as the stock tumbled. So for me AMD has been fabulously profitable and the best is yet to come. As the saying goes there's more than one way to skin a cat.
You might find it enlightening to go to Yahoo and compare stock prices on INTC and AMD for every period up to and including 5 years. Funny how Mr. Market seems to see something in AMD that makes it more valuable than the company with the monopoly.
What is a company worth? Is it based on the money it has in the bank? On the manufacturing capacity? On the history of the company? If so then INTC would seem to be worth the huge multiple it currently has.
My own feelings are that while the above are important, they are largely rear view mirror things, and unless you’re in reverse they don't say much about where your going. Much more important is the innovation the company is demonstrating, the amount of fat in the company, and of paramount importance, what the management is like.
On all three of those standards INTC gets a big "F". I've already expressed my opinions about INTC management, or more correctly, lack there of. As far as innovation goes I've talked about that also, but I don't want to give the impression that the engineers are to fault. As I've said it's a management problem related to driving the company in the wrong directions. The third thing "FAT" is a little harder to quantify because if you compare INTC to AMD it looks like every INTC employee earns a lot more for INTC than AMD employees do for AMD. But that statistic is skewed because size is very important in the games AMD/INTC play. There's a large fixed ante needed just to play and costs don't increase proportionally with sales.
Even with the huge cost advantage INTC has it's very telling that INTC needs an ASP something like 1.5 times AMD's ASP to be profitable. At $100 ASP AMD would be in pig heaven(especially at 90nm) while INTC probably will need $130 even when they eventually ramp their 90nm process on 300mm wafers.
So far I've been talking about processors, since that's the only thing INTC makes that is profitable. INTC manufactures a whole load of other products that PC's must carry. INTC has been dropping tons of money into all sorts of ventures for a very long time in an attempt to diversify, rather unsuccessfully. The success of the latest investment, LCOS rear projection HDS TV's, won't be known for some time but the SB analyst doesn't think much of it.
Anyway, the point is that INTC is totally dependent on a high ASP for its' processors(servers/portables mostly) to keep the company afloat. With AMD starting to make noticeable inroads in those markets due to non-competitive products and manufacturing problems at INTC, INTC must lower prices. The trouble is that INTC can't lower prices since they have so much of the market,. To do so would really hit the bottom line. Further, AMD has succeeded in doing what INTC marketing has wanted INTC to do namely differentiated their product to the point where comparisons with INTC products aren't meaningful. The only place where INTC competes successfully is in the mobile segment. In other areas the AMD advantage varies from little to huge amounts(servers).
As far as I can tell the only thing keeping INTC afloat is the current computer market rebound. Should that start to taper off all those shiny new fabs are going to have problems staying busy(actually I think they are already having problems, but who knows?). So far INTC has been able to maintain profitability by substituting volume for ASP's. I really have my doubts though about INTC's ability to maintain their rosy margins projections.
In the final analysis, right now I think INTC is a much riskier investment than AMD, and that situation isn't likely to change any time soon.
CombJelly
Well I think we're going to have to disagree on this.
As far as I can tell most of the major problems INTC has had were caused by INTC marketing trying to create products that were outside the mainstream market in a vain attempt to retain INTC's monopoly (Rambus memory, Itanium). The rest of the problems(design/production) are sort of related in that INTC in trying to protect itself from competition avoided mainstream solutions. The P4 with it's total emphasis on speed at the cost of everything else and the rejection of the CU and SOI processes are examples of the hubris at INTC. INTC has consistently chosen the hard way (non-mainstream) to do things in a not very successful attempt to retain the monopoly.
It's really quite amazing how far INTC has been willing to go to avoid direct competition with the runt (AMD). In the end all these attempts have failed and indeed had the opposite effect of that intended. Today AMD is looked at (by those knowledgeable) as the leader in both design and production( with IBM's help). Almost every worthwhile INTC initiative lately has been a copy of something thought up at AMD.
These decisions, to do it the hard way, were made by INTC management, no one else is to blame. Could they have chosen a worse path to follow?
When I stated investing in AMD again in 1999 it was largely done on the promise of the triple piped FPU in the soon to be Athlon. At the time I figured in 4 or 5 years AMD might be able to take 30% to 35% of the CPU market and be fabulously profitable. No way did I ever figure INTC management would do so much to help AMD. Today, I honestly don't know where the ceiling is. One thing is for sure, until INTC changes it's philosophy/management things are just going to get worse.
There are some indications that reality is finally starting to prevail(dumping of P4, adoption of AMD64, model numbering, etc.), but a lot more needs to be done. In the meantime the days of the INTC monopoly are fading fast. Of course this has loads of distasteful implications for INTC and its stockholders. As far as I can tell INTC is about 2 steps away from a massive coronary. I'll get into that in another message.
There's nothing funny about the damage these guys are doing to INTC. Lots of little people are going to feel the pain. A lot of peoples retirement are being threatened, not to mention the jobs of INTC employees that are relying on these buffoons to make the right decisions.
In the capital markets many, many times the capitalization of AMD is at stake.
And no I have never met the guys or worked for INTC. I just hate incompetence wherever it happens. Buy the end of the year boiling in oil may seem too good to a lot of INTC stock holders.
One of the things I like about Hector is he's a manager in the truest sense of the word. I've got nothing against Jerry, he did a great job keeping AMD alive and getting AMD to the point where it finally had a chance to get off life support. But Jerry had a fatal weakness in that he viewed AMD as a family and he never wanted to let anyone go. For someone that could be as mercurial as Jerry could be it seemed an odd contrast to see him unable to make the hard decisions. Hector, on the other hand, had no qualms about doing what was needed to save the body. Hector took over at a time when the continued existence of AMD was in serious doubt. There's no doubt in my mind that the quick and appropriate actions he took has been as much responsible for the AMD turn around as Jerry’s hiring of Alpha guys and the "bet the farm on Athlon" initiatives.
Now contrast the above leaders to the Barret and Otellini freak show going on at INTC. These guys have taken a gold mine with a license to steal and turned it into an asylum. If I were an INTC investor I would want both of them breaded and boiled in oil and then mounted on sticks like corn dogs.
The very definition of upper management’s responsibility is to set the tone and direction for a company. What we have seen over the last 5 years is a company adrift where one problem is immediately followed by another. Where decisions are made by marketing and disparate groups conflict with each other.
As long as INTC had monopoly power almost any problem could be swept under the rug of profitability. However now with AMD having taken both the high grounds of design and production, INTC profitability is going to be under the sort of intense pressure INTC hasn't seen since the memory days. In short the warts on the INTC hag are going to become a lot more obvious as the year progresses and it's going to take a lot more that some mascara to hide what has become a truly ugly picture.
I've been through this before and the amount of time it takes for reforms to be initiated in a company is directly in proportion to the hubris and arrogance of management as well as the success the company has had in the past. I figure we've got at least a year before the problems become obvious to the world, and probably 2 years before anything is done about it. Make no mistake about it INTC upper management is the problem and a replacement crew is the only cure.
BUGGI1000
I always thought that Opteron would do well in the server market, but wasn't so sure about AMD64 in the retail side, at least until MSFT gets an OS out there. It does look like AMD64 is getting more and more acceptance though. It seems almost daily that we're hearing about AMD design wins.
I think AMD is handling the ramp about as well as can be expected. The added bonus of having design/manufacturing superiority gives AMD some latitude in how they want to market AMD64 chips. It would be nice if AMD could sell tons of the chips, but realistically INTC is still the name most of the market associates with high quality PCs. It's going to take time. As I said the 2700+ entry, in particular, seems to be an attempt to expand the AMD64 market. At least it's a differentiated product from anything INTC has. Breaking new ground for an upstart is always tough.
Your right about AMD being a world product. With better than 80% of its sales outside the U.S., and increasing, you have to wonder about how knowledgeable some of the analysts are. I particularly like the 21 analysts on Yahoo that have a hold, sell, or strong sell on AMD. It really makes one wonder what universe these guys are living in?
http://finance.yahoo.com/q/ao?s=AMD
One of the reasons I own AMD is because in a less U.S. centric world(slower U.S. growth), AMD sells products the growth parts of the world want and need. Further, lots of the residents of those parts of the world, haven't seen a computer, less bought one yet. Laptop computers and wireless phones are going to be big status symbols in the developing world.
As I remember it, Henri's comments were from an interview done in France, in French, that didn't translate very well. There was lots of confusion about just what he said. In the end I just assumed he was spouting the management line “promise less deliver more”.
I can think of a lot of reasons why the head of AMD sales would not want to let on that things were going well. I can't think of a single reason that he/AMD would want to promote q1 until absolutely necessary.
Thanks for the SB update.
I particularly like the reduction in “number of days inventory” of NOR flash.
One of the things I would like to know is what prices AMD got for the new flash capacity that came online in q1?
With the move to 110 nm and mirrored flash, costs should be dropping even as prices are rising/flattening.
http://biz.yahoo.com/rf/040402/column_stocks_outlook_3.html
Wall Street analysts are expecting the companies in the S&P 500 to post an average gain of 16.9 percent in their first-quarter operating earnings, according to Thomson First Call (News - Websites) . That number has risen steadily since the beginning of the year, when the consensus forecast was for a rise of 13.4 percent.
Me again...
The Cokes and other commodities did not grow at 16.9% in q1, which leaves the cyclicals and particularly the cyclicals that are in their growth period to carry the load. Both AMD and INTC should have done well with INTC compensating for lower ASP's by increasing volume while AMD maintained volume and increased ASP's.
The one thing that bothers me is the continuing reports of manufacturing problems with AMD64 products. I've seen this reported enough and by multiple sources that I don't write it off even though it seems to go against everything management has been saying. Personally, I'm inclined to believe that AMD has been carefully managing AMD64 availability to maintain prices. I see the recently released 2700+/2800+ as being nods to high end price resistance. I think most people are like me, waiting for 90nm chips and a MSFT OS before buying.
I don't think the market was lousy.
http://www.theinquirer.net/?article=15138
The article says microprocessor sales were off .7%(.007) in February. That's a gnat and could have come easily out of INTC's hide. Like I said March may have been up more for AMD given the back end nature of sales in q1.
It seems that INTC usually knows their sales even before the quarter starts. If sales come in at the low end of revised estimates it will be proof that INTC is deep do do.
I think we basically agree that things have never looked better for AMD and things are only going to get better.
Well if you look at what AMD has done over the last few quarters, they have consistently beaten estimates that were made based on what management said.
With all the problems INTC has been having, both manufacturing and design, it's hard to see how AMD shouldn't have been able to capitalize on some of them.
As I remember it q1 is usually fairly back ended, thought not as much as q2, so some of the INTC problems may have come to roost in the last 2 weeks of q1.
INTC's reporting on the 13th should give an indication of what we can expect from AMD. If INTC is at the low end of their revised guidance then AMD should have done very well. Even if INTC meets their revised guidance AMD could still have done very well given the stronger than usual q1, but probably not as well as I'm currently thinking.
Longer term I agree that things only look to get better.
I wrote off Henri's comments as more "promise less and deliver more".
If you think about it things are a lot different this q than q4. For instance there's Sun and HP and all those comments about portables(Emachine amongst others) and China. Then there's AMD's complete dominance of the high end 32 bit chip market, not to mention a monopoly on 64 bit machines, both servers and retail. And this is without even considering flash where channel prices have gone through the roof. I know AMD is tied up in LT flash contracts, but a lot more volume(20%?) should have come online this q. A lot of that probably was not contracted for at the old prices.
The only way that I could see AMD not doing better than $.12 is if there was a huge increase in costs for some reason. Otherwise a lot more dollars should have fallen to the bottom line.
As far as volume goes we were up around 12M shares awhile ago. We ended Friday at 11M average, so volume hasn't been anything to write home about. But your probably right about some of the new money looking past q1. Still AMD has to meet expectations or there will be a correction.
At the risk of sounding like Niceguy it's hard to believe, according to Yahoo, that 27 analysts still have AMD earning $.03 this q.
http://finance.yahoo.com/q/ae?s=AMD
Well the analysts may be thinking $.03, but it's pretty obvious Mr. market thinks AMD is going to earn a lot more. Given the action of the last week or so I would guess the market is expecting $.07 to $.12 in earnings.
I would be the first to agree that volume hasn't been that hot lately. But this just means, given the price appreciation, that the AMD stock holders are very reticent About selling. Something I don't think will change unless earnings are below the above estimate.
Personally I’m expecting north of $.15 this q, but then I’m such a pessimist.
Oh, as to those analysts, if memory serves, this will be the 6th q in a row that the analysts have either over estimated the loss or underestimated the earnings, and their estimates have been getting progressively worse. Looks like the analysts haven’t figured out the new mantra of “promise less and deliver more” is in full swing at the “new AMD”.
The way I look at it AMD is the horse that brought Inouye to GTW. Having won the golden ring on the green horse, there’s little incentive for him to change horses now that he’s setting the pace for the combined company. The loser in all this has got to be Dell, having associated itself completely with a company that is being viewed more and more as not being competitive on either a design or production basis. The actions by HP, announced yesterday, are proof that the Emachines AMD policy was working. HP had the ability to switch horses, Dell is riding the same old nag to the glue factory.
Avatar
Looks like Inouye isn't wasting any time puting his imprint on GTW. This with the previous article about HP expanding into retail, eg. Frys, should bode well for an expanded AMD retail presence.
HP support cotinues to improve
From yahoo
http://www.infoworld.com/article/04/04/01/HNpavilions_1.html?source=rss&url=http://www.infoworld...
It's starting
http://biz.yahoo.com/prnews/040330/sftu097_1.html
SUNNYVALE, Calif., March 30 /PRNewswire-FirstCall/ -- SST (Silicon Storage Technology, Inc.) (Nasdaq: SSTI - News) announced today that its revenue in the first quarter is expected to be between $100 and $104 million versus previous guidance of $94 to $100 million. Gross margin is expected to be in the range of 36 and 39 percent, versus previous guidance of between 31 and 33 percent. Earnings per share is expected to be between $0.10 and $0.14, versus previous guidance of between $0.08 and $0.10.
SST's SuperFlash technology is a NOR type, split-gate cell architecture which uses a reliable thick-oxide process with fewer manufacturing steps resulting in a low-cost, nonvolatile memory solution with excellent data retention and higher reliability. The split-gate NOR SuperFlash architecture facilitates a simple and flexible design suitable for high performance, high reliability, small or medium sector size, in- or off-system programming and a variety of densities, all in a single CMOS-compatible technology.