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I think he's referring to the employee stock option reprice happening sometime this week - tomorrow I believe it is?
Works out to the favor of AMD employees eligible for this as they'll get a lower strike price on their repriced options. The idea that the stock is going down because of this is kind of ridiculous. Directors and above were not eligible for this reprice, so management really has no good reason to manipulate the stock.
I think it is down solely because of Intel's comments yesterday, and likely an analyst spin on this comment. AMD is doomed! I've heard that one before...
Very large volume today (over $ million shares in the first hour). Spiked down to $14.25, but is now kicking back up $14.75. I'm sure investors weren't pleased that Intel is saying they will have a competitive part even though it is good news for AMD.
Looks like my timing on buying calls wasn't so good. Guess I'll have to double down. :)
Pulling out of your investment when AMD64 extensions materialize seems a bit rash.
I should have been more clear. I will pull out if Intel does this and it starts to become a factor. That is, when Intel starts taking share back and reducing AMD ASPs because they hold all the cards again.
LGA 775
I have seen numerous posts suggesting this new socket is going to somehow save Prescott. What is the argument behind this? Is Prescott limited in frequency because of power delivery? Are you guys thinking that when it gets the extra power/grounds pins, we are going to see a major jump in frequency right out of the chute?
I just don't see how LGA 775 is going to help performance that much unless this is the issue.
Also, they will probably employ the Microsoft strategy of adopting and then adding proprietary features to create future products that are not fully compatible with competitors
This would be the smartest thing for Intel to do. Adopt AMD64 as quickly as possible and make it their own by adding things to it. They'll set the standard, and people will soon forget that x86-64 was developed by AMD first. If I see Intel following this route, I will pull out of my AMD investment as AMD will be right back in the usual position of following.
Perhaps Intel has already done this and it could be a nasty surprise as some are suggesting.
Intel still talks agressively with their volume targets for the chip in Q2..
They don't have much choice, do they? They need to fill those 90nm fab lines with something.
I picked up a small amount of April 17 calls to complement my other positions.
My position now:
Short Feb 15 puts (easy money?)
Long Apr 17 calls
Long shares (80% of which held over 1 year)
I think things are looking too good short term to keep this stock under $20 for much longer.
Intel has the same problem that AMD has had, they get their pricing dictated to them by their competitor.
I don't completely agree with this. AMD can only supply 10 million processors a quarter at best without getting IBM to manufacture some parts for them. I think we will find AMD definitely securing higher ASPs and marketshare this year which could send the stock skyrocketing, but Intel will still be able to maintain a good mix because AMD can't supply everyone, and there is still a strong Intel brand that will prop them up. The good news is I don't see Intel being able to wage a price war, and I would hope AMD is not so stupid as to underprice their products in the face of lowered competition.
It looks good for AMD, but still not terrible for Intel. Intel will likely work things out before it becomes terrible. Intel can simply concede a little marketshare and still be profitable as long as they maintain ASPs. I still believe Prescott will be close enough to the highest performing A64 throughout the year that this will be possible.
Prescott should be a huge disappointment for any Intel investor. If I still weren't convinced that the market had huge growth opportunities this year, I would be selling my Intel shares and using the money to buy AMD.
wbmw-
I have to give you lots of credit here for being able to change your stance. I expected you to always play the Intel side and I have always treated your comments as slightly biased in their favor, but it is nice to see you are more reasonable than I thought. Thanks for you contributions to this board. You have elevated the quality.
I haven't counted Intel out yet. I think they can remedy the problems over time, but it seems AMD has a nice window to extract a major benefit from Intel's slip ups. That pleases me as an AMD investor.
I like your idea about Intel using their superior mobile core in desktop parts. It seems like they could do well by this strategy. It isn't too late. Tell the guys in charge to get on it!
Just a note from Anand's review of the Envy 855:
The left side of the system is fairly bare, due to the
placement of the M:855’s battery: a huge 12 cell 14.8V 6.6AH
(our sample was 2.4AH) that weighs in at about 0.5 pounds.
and battery life that in real world tests bests our Centrino notebook,
This notebook has a much higher capacity battery than any Centrino notebook...so it isn't exactly fair to compare. A DTR vs thin and light.
Don't get me wrong. I would love to have one of these. I think the compromise in size and weight over a Centrino thin and light notebook is worth it.
Where have you seen this? I watch pretty closely and I've never seen Intel make such a claim.
I don't have any links handy, but numerous times Intel executives have hinted this. It has been posted on this board. Perhaps my statement overstated what they actually said. That was not my intent. That is what I inferred from their statements. I don't have time now, but I will attempt to find the quotes. Maybe someone else has them handy.
But Dell has a backup plan. Intel can come out with AMD64 machine in a nanosecond
Rumor alert - take it as such - not even sure I should post this since it is pretty useless in rumor form.
My Dell contacts tell me Dell execs are talking to Intel almost daily asking for their 64 bit x86 design to be released with hints of using Opteron/A64 if they can't have it. It is very likely one of two things is going to happen soon.
Disclaimer: I'm making no investment decisions based on this, so you shouldn't either. I found the info interesting, so I thought I would share.
The thing I don't get is, if Intel released an x86-64 compatible part now as they claim they can, would it not have to have a different socket, chipset, and motherboard? Since there are no rumors of these in existence, we can assume the platform is going to take time to become a viable product even if the chip is ready. 6 months at least...right?
this is really a post about the futility of these power arguments relative to high vs. low IPC.
I agree with this. There are so many factors. All we can do is look at what power the final products consume and compare their performance and see which is more power efficient in total. It may be that Intel has a more power efficient microarchitecture, but AMD might have the advantage with SOI. Like I said in another post, if Prescott power consumption turns out to be very high as rumored, AMD is going to have more power headroom, which could result in a performance advantage. That is important because AMD needs to maintain equal or better performance than Intel or their ASPs will get killed just like in the past, leading to more losses, leading to me having to sell my AMD stock, which I'm not ready to do just yet. :)
Power is something that can also be optimized in later design revisions, so don't expect Prescott to always be a power hog. Intel will likely make large improvements over time by working on any number of things including microarchitecture tweaks, non-critical path power optimization, and transistor tweaks. It may be they can make some huge improvements in power later on, and that could open up a huge amount of frequency headroom.
If you want to talk at the level of choices deciding 3%
changes in computational power efficiency, well yes, my
description is oversimplified.
Add a few of these up, add in the other things I commented on in another post, and you can end up with a 30% difference in power per unit of real work between various cores. All we have to do is look at power output and some benchmarks for each core, and we'll see this difference.
So let's see what Prescott and 90nm Athlon64 bring to the table. Rumors are already saying 90nm Prescott is going to consume more power than 130nm Athlon64 at the same level of performance. We'll see if this holds true. If it does, AMD has more power headroom, which was what this was all about, right?
Someone should go find out the transistor counts of each of the major cores. I think you'll find P4 and Prescott have a lot more transistors than Athlon and Athlon64 cores given the same size cache. This is more telling than these simplified statements.
Well I did this myself. Amazingly, it appears they have nearly the same transistor counts...
Core Trans L2 Die(.13)
Intel willamette P4 42M 256K ?
Intel Northwood P4 55M 512K 145mm2
Intel Prescott P4 >100M? 1M ?
AMD Throroughbred 37.6M 256K 84mm2
AMD Barton 54.3M 512K 101mm2
AMD A64 105.9M 1M 193mm2
In a lower frequency, higher IPC design, you will tend to have far more logic gates changing state simultaneously (i.e. higher switching capacitance) per logic pipestage. In a higher frequency, lower IPC design, you will tend to have far fewer logic gates changing state per pipestage.
Higher frequency, lower IPC designs tend to have more gates overall. There is more feedback logic, more duplicated logic, more wiring, etc, so by nature lower IPC designs are less power efficient.
Someone should go find out the transistor counts of each of the major cores. I think you'll find P4 and Prescott have a lot more transistors than Athlon and Athlon64 cores given the same size cache. This is more telling than these simplified statements.
There is more to it than that though. Not all transistors on a chip are created equal. These days individual transistors can be tweaked for speed or power. Proper device loading is also important. You can optimize the load on a transistor for max speed or low power, or some combination.
Throw in process, and you have a hugely complex equation. Architecture choices, design optimizations, process tweaking. Too many factors to boil it down into such a simple statement.
To execute an x86 instruction takes a certain amount of
logic gate wiggling. Regardless of whether a given level
of performance is obtained by wiggling many logic gates
relatively slowly or fewer gates faster, the amount of
power consumed won't vary greatly for a given process
feature size and supply voltage.
I'm surprised by your post, chipguy. That is way oversimplified. Architectures themselves can be high or low power oriented based on their efficiency and amount of speculative execution they do. It is all about tradeoffs. You can add an architecture feature that might buy you 2% in benchmarks, but adds 5% in power consumption. The project planners have to decide what is more important. It is all about making wise choices early on.
Also - the physical design itself can be optimized for power. I would guess Intel has the upper hand here as they have lots of resources to throw at this.
It seems to me that the "Netburst" core is too complex, requiring too many engineers, too long of a schedule, and more areas where things could go wrong.
Careful planning is very important in the CPU business. A few poor choices early on can lead to long term trouble, even with the best design, product, manufacturing, and marketing teams in the world. To me, as an outsider, it looks like management is doing a poor job.
I used to say the same about AMD, but I think management has improved there over the years.
Thanks for your insightful and honest post.
Intel's profit now is largely on the back of past success and excellent manufacturing of existing quality products (P4, mobile, etc). They have positive momentum, which can carry on for a while. The delays and problems in their new products will be more apparent to the bottom line in the coming year or years. There is still time for them to correct all these things, and I'm not saying they won't. It just appears to an outside observer that things are not running smoothly (other than manufacturing).
I'm trying to determine future profits of both companies so I can make better investment decisions. Didn't mean to turn this into Intel vs. AMD argument, but I guess that goes with the territory.
While I think your post was a bait, it did have an iota of merit. :)
Sorry - no bait intended. I just call it like I see it. Feel free to disagree. I would like to hear all opinions. I appreciate Intel employees and investors past and present being here. There is valuable information to extract from you, most of the time. :)
AMD used to be the kind of company (under the rule of Sanders) that would sacrifice profits and cash to "beat Intel"
That was kind of my point. As a long term Intel investor, I would think this kind of thing would be annoying, or even infuriating. I can understand why many hated Sanders.
I've said it ever since I learned of the Hammer core: I just don't think it has anything special that Intel couldn't beat.
I agree with you here. Hammer isn't all that complex. Given Intel's resources, they should be way ahead, but somehow, they are not. Something is amiss. My guess is poor management. Intel has become a bit top heavy. I have no doubt Intel has quality engineers, probably the finest, but management is screwing things up by making bad choices or having trouble planning and executing to plans. They better get their act together soon.
See how 2 people can look at the same data and see different things?
Interesting perspective. I still think Intel was a better company operationally under Andy Grove. There seems to have been a lot of mishaps lately. I just don't see the well oiled machine they need to be. I guess this is a work in progress. They ought to be careful as AMD is looking stronger than at any time in the past.
Plenty of eggs in plenty of baskets, no need to worry. Thanks for the concern though
Hey its your money, and it sounds like you have it well covered. I suppose I would keep some Intel stock just for nostalgia value if I had made your kind of fortune on it, but I wouldn't kid myself too much about it being a good investment anymore. I guess if you have waded through the last 5 years, you should at least hold it through this up cycle. I think they have at least one more good run in them.
Good luck
Semi and other long time Intel investors-
If I were in your position, I would probably despise AMD (I'm not saying you all do - I just think I would personally). After all AMD forced Intel to lower ASPs, has caused them to rush products out the door, and countless other things that have affected Intel's stock price for the worse. Intel probably would have been another 5 or 6 banger over the last 5 years if it wasn't for AMD. AMD just won't lay down and die.
Thank you Semi for your honesty. I sort of wish others would do the same, respect each others biases, and drop the stupid baiting game.
Well, I bought most of my intel stock in 1983, at around $20.00 per share ... effectively paid ~ 20 cents per share for,
I don't want to be critical, because you have obviously done very well with this investment, but wouldn't it be wise to move a good portion of your Intel investment into better growth prospects or even a stable value fund? I'm not suggesting AMD, but I think Intel's best days as a stock performer are behind them, even factoring in dividends.
Just my opinion. I know several Intelionaires who seem to be hung up on looking for better investments because Intel has treated them so well for so many years. I don't blame them for their loyalty, but I think if it were me I would be finding better places for my money.
And by the time and volume it looks like we are selling very nearly the same size orders!
Indeed! Let me know if you end up rolling these. I need to consider that strategy more rather than always taking assignment.
I just got partially filled at $.55!!!
Just got completely filled...
Nice-
I just got partially filled at $.55!!!
Attempting to write Feb $15 puts for $.55 here. We'll see if I get filled. I think this minor downtrend will continue for a few days, so I'm not in a major hurry.
I save proceeds to help with any assignments.
One of the games that will force some PC upgrades (mine included) just came out in demo form.
I know we have the anti alien blasting camp here, but gaming is the biggest driver of the high end PC segment, so it is important. The game I am speaking of is Far Cry. This is one of the games that is touting having A64 optimizations (although I'm not sure they do any good until 64 bit desktop Windows is out). Still, Athlon XP64 systems should do well with this game even without the 64 bit optimizations. I grabbed a couple of initial reactions from comp.sys.ibm.pc.games.action:
Wow! Far Cry totally #*$&ing rocks. AI, combat feel, physics reaction of dead bodies, tactical choices ... can't wait for this one, I'm going to buy it the day it is out. Can't imagine what kind of hardware is needed for full graphics options though ... running on a P4 2.4 Ghz, GF4 ... "medium" is the best it can do with a decent frame-rate outdoors. Maybe they'll continue to optimize it.
This is stunning...runs like a pig with all the options turned up(XP2800+..Geforce 4600..1 GB Corsair), as was said already, but with the auto detect settings it still looks great and runs fairly smoothly. Perhaps the water effects at the beginning are slowing it down because they are sublime! You'll be booking your hols after the first minute. Freedom of movement and interactivity with other objects is cool. A few too many keys for my liking..I mean, a "hold you breath" key ? Kinda goes without saying doesn't it ? It's early days, and I hope they get it running a little better on everyday PC's . God knows how/if this would have run on my old 1800+ Geforce 3 !
Between this, Half Life 2, and Doom 3, there is going to be some serious hardware upgrades from gamers over the next 6 months. This bodes well for both AMD and Intel (assuming Prescott can perform well with these games). Last year there was hardly any reason to upgrade, but this year appears to be different.
I've got a limit order in to sell Feb $14 Puts @0.25.
Did you get these? I had a limit on Feb 15s that didn't go through. Admittedly, I set my limit high, but I'm in no hurry to write. I think AMD might trend down slightly over the next week or so.
I'm not much into writing puts for $.25. I prefer $.35 and up, and actually I try to target closer to $.50. I figure I can write half the number of puts I would have to write at $.25 with less overall risk in case there is a disaster. I don't mind getting assigned occasionally. It worked out great for me getting assigned last month (I was assigned Dec 17 puts that I had written for $.75, and I sold the shares yesterday for $17.40 for a net of $1.15 per share).
My new plan on the long side is to unload my long term shares just before Q1 earnings, although I may change my mind if things continue to look good for AMD at that point.
Good luck
Revenue
AMD just came within $1M of all time record revenue (back in Q3 2000). The comparison isn't exactly fair as they now count all of the memory revenue where before they only accounted for 50%.
At first glance, the increase in revenue for the memory group implies that they should have made a profit. Memory went from $424 to $566 in revenue with only a $46M in loss reduction. This looks like a terrible margin (32%), but the memory group is reported differently than expected. They report all of revenue, but only 60% of profit/loss. So in reality the loss went from $77M to $5M. This implies margins of 51% rather than the 32% that you would calculate just by looking at the numbers without knowing this. Still not spectacular. They must have sold a lot more low end parts this quarter.
Well I got out of my trading position on 2 trades today. Averaged $17.40. I'll be writing puts on any pullback over the next few weeks. I don't necessarily expect a significant pullback. The earnings report seemed good, although a bit below my expectations for eps. I still need to listen to the CC.
p.s. Hey Elmer-
Are you still writing puts on AMD or taking a breather now that it is in a higher trading range? I usually get a little nervous writing puts on stocks that aren't in a slump anymore. I think I'll continue to write as long as it is below $20, but over $20, forget it - too risky. I'll look for other stocks to write on.
I'm unloading my trading shares (acquired at $16.25) tomorrow (tuesday). I expect the market is going to be very strong, and AMD way up (near $18) based on Friday's unusual activity.
I expect AMD to beat the estimates handily, but I'm guessing a pullback for the rest of the week regardless of the result. On any significant pullback ($15.5 or lower), I'll write some puts for nearly the same number of shares I'm selling. I want to get back to writing monthly puts on AMD, and I'm too overweight on AMD shares to do this. I could write covered calls, but I think a pullback is likely so I'm doing a straight sell and will follow up with the put write after a dip if possible.
I'll still be holding my long term shares (avg. price around $8.5) for a while, which is the majority of my position. Things are too interesting to let go of them just yet. I expect AMD will maybe get some additional design wins and grow marketshare in all segments in Q1.
Looks like we have broken out of the last month's trading range with authority. This bodes well.
It does surprise me being options expiration and all. Many option holders might have already taken offsetting positions to lock in gains. Or it could be there is just enough other buying interest to overtake this.
Should be a good show over the next 3 trading sessions.
Nice move.
Maybe there is still hope for my Jan 19 calls? LOL. At least I bought these with profits from my previous Jan 15 call miracle gain (back when they were in the $3 range). In the future I will roll less of a profit over from a call gain into more aggressive calls. I knew better, but I gambled anyway, and this is typically what happens when you gamble. I've learned this lesson enough times that it is finally sinking in.
On the positive, the shares I took assignment on last month (Dec 17 puts) are now above break even ($16.30) overall. That didn't take too long.
My position now is all shares, and I suspect it will be that way for a while. I don't see anything that warrants buying more calls, and I'm too overloaded to write more puts. I may still write some covered calls if it gets closer to $20, or just do a straight sale on some of the shares I was assigned if there is a quick spike up.
Good luck-
EPS guess
I didn't get my entry in on time for the official contest, but I went and looked at all of your estimates. The average EPS guess seems way too high to me, but I hope I am wrong.
If I had entered, I would have guessed
CPU $600M
Flash $500M
Tot $1120M
EPS $.18
Stock $18 before announcement on tuesday, $16 day after.
Huh? I thought max pain would be within a point or two of where we are now.
Remember this is January. January is one of the most popular leap option months. Tons of these contracts were opened over a year ago when AMD was well below 10.
So yes, there is a lot of value in in-the-money call options.
This represents a potential downward pull. Again though - we don't know the underlying position of the holders at this point, so there is no telling exactly what this represents. The holders may have already taken offsetting positions (risking the tax man finding out).
I would guess one or two million shares extra of the sell side.