Wednesday, May 3rd 2017
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AMD Stock Nosedives to Biggest Loss in 12 Years
In the wake of its Q1-2017 financial results, AMD stock on NASDAQ went belly-up, posting its biggest single-day crash in 12 years. At the time of writing, the stock fell 24.22 percent, down to $10.30 per share, which is rivaled only by the 26.2 percent plummet of 11th Jan, 2005. According to Analyst Christopher Rolland at Susquehanna Financial, only a "near-perfect" Q1 results by AMD could have prevented this crash from happening. In a letter to his clients, Rolland writes that "AMD's new products are beginning to accelerate growth, but perhaps without all the gross margin benefits [they] had hoped for."
Susquehanna Financial is keeping its rating of AMD neutral, hoping that the upheaval will settle down at $12 (a recovery from its current $10.3). UBS analyst Stephen Chin is a little more grim, after posting a sell rating, with a price target of $9 (a further 13 percent selloff). "We keep our sell rating on the stock as we see limited EPS growth near term to support its high multiple as it need to invest heavily to keep pace with Intel and NVIDIA," Chin wrote. "We also estimate limited operating margin expansion in the near term," he added. To dig itself out of this, AMD needs to successfully sell a quantitative amount of products with high margins, and post good results over the next quarters.
Source:
Marketwatch
Susquehanna Financial is keeping its rating of AMD neutral, hoping that the upheaval will settle down at $12 (a recovery from its current $10.3). UBS analyst Stephen Chin is a little more grim, after posting a sell rating, with a price target of $9 (a further 13 percent selloff). "We keep our sell rating on the stock as we see limited EPS growth near term to support its high multiple as it need to invest heavily to keep pace with Intel and NVIDIA," Chin wrote. "We also estimate limited operating margin expansion in the near term," he added. To dig itself out of this, AMD needs to successfully sell a quantitative amount of products with high margins, and post good results over the next quarters.
39 Comments on AMD Stock Nosedives to Biggest Loss in 12 Years
If it falls to previous low levels, AMD might be in dire trouble.
"We expect revenue to increase 17% sequentially plus or minus 3%, non-GAAP gross margin to be approximately 33%"
Edit: and they burned a third of their cash this quarter
Remember, for almost a year now the story was AMD specifically targeted Polaris at midrange, because that's where the money is.
On the other hand even Intel's share price lost $2 after a good quarter.
Anyway, this should teach something to people who wish AMD to produce good products so they keep buying Nvidia or Intel products. Just the idea of competition brought the 4 thread Kaby Lake Pentiums and the 6 core Coffee Lake. If AMD doesn't make money, enjoy a decade of 6 core satisfaction.
This isn't a time to play it Intel/Nvidia hardcore fanboy, it's not a time to attack AMD anytime you think you have a chance. Give them some positive feedback where they deserve it, don't attack them for no reason just to satisfy your personal needs. Bury the hatchet for a year, or competition will become a fantasy until ARM becomes a true competitor to x86. And until then, prices will go up, performance will stay stagnant and half of the tech sites and forum that have the PC in their center, long gone or transform to something that will look like GSMArena.
if this happens i suppose it will start with the weaker players.. AMD being one of them..
trog
Still, same caveat I put on all my posts, Ryzen is a good product and a great value in the short term. Hopefully that short term can turn long term with upcoming products. As is it just wasn't what we and AMD needed.
seekingalpha.com/article/4067885-amd-drops-weak-earnings-report-investors-buy-now
Bear in mind to that AMD at $10.32 a share is still way above what they were a year ago at $4 a share and a few months before that they were at $2 a share. Seeking Alpha is projecting a price target of $19.53 after this summer. It's a gamble though.
This would only look "sensational" to someone unfamiliar with the stock market.
What this news say, it AMD does not expect to cash in in a bog way in the near future. And that is a bit of a sad news for enthusiasts, because the near future is Ryzen, Naples and Vega. But hey, like some has already said, AMD is already in a better than a year ago, so there's that.