Intel Corp (INTC)

[VeeCee]

Not so good news for AMD
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http://blogs.barrons.com/techtraderdaily/2014/09/17/amd-short-it-on-pipe-dreams-pc-declines-says-bernstein/
AMD: Short It on ‘Pipe Dreams,’ PC Declines, Says Bernstein
By Tiernan Ray

Bernstein Research analyst Stacy Rasgon today advises investors to “press the short” sale thesis on shares of Advanced Micro Devices (AMD), which he rates Underperform, witha $3 price target, arguing that the stock seems much too strong of late given what was an “atrocious” performance in Q2, announced back on July 17th. The stock, at a recent $3.84, is down 16% since the 17th, but flat since the big drop in the shares the following day.

“Nevertheless, we remain astonished at the strength (we had fully expected the shares to revisit much
closer to our $3 target price before they approached the neighborhood of $4 again).

“We believe now might be a good time to consider pressing the short,” he urges.

“The PC business appears to be in complete disarray, the console story has now lapped itself, future “opportunities” (e.g. new semicustom design wins, ARM servers, etc) appear more of a pipe dream at the moment than anything else, and (very tactically) Q4 numbers appear far too high to us.”

AMD’s PC revenue isn’t stabilizing, as the company claims, with desktop sharing falling from 16.3% to 15%, and notebook share slipping from 10.9% to 9.6%.

AMD’s shipments into the Sony (SNE) PlayStation 4 and the Microsoft (MSFT) Xbox ONE is a story that probably is peaking, in terms of revenue, this quarter, he thinks.

And the company’s promising new initiatives — chips for so-called micro-servers, new custom designs, etc. — actually offer little promise, he thinks:

Indeed, the company has been adamant that they should close 1-2 new semicustom designs by the end of the year. But we do not believe any of these will amount to much. AMD has indicated a ~$250-$500M lifetime revenue opportunity from these sorts of wins. Given a likely lifetime of at least 5 years, this suggests perhaps ~$13-$25M in incremental revenue per quarter from each new win (for some context, in July we took our Q3 numbers down by $160M). AMD needs 10+ of these types of semicustom wins to make any sort of real difference, unlikely to happen soon in our opinion. And, we believe any announcements are unlikely to be accompanied by any tangible financial targets (the company has repeatedly referred to these as “confidential”).