Wednesday, May 3rd 2017

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
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39 Comments on AMD Stock Nosedives to Biggest Loss in 12 Years

#26
medi01
So, where did the 300 million go, after all? Any theories?
Posted on Reply
#27
rtwjunkie
PC Gaming Enthusiast
bugThis would only look "sensational" to someone unfamiliar with the stock market.
^^^This.
Posted on Reply
#28
dozenfury
Tbh the whole market is way overvalued right now. Check the Shiller PE numbers on the market, they are downright scary. Over 23 is due for correction and we're at 29.3. In fact it's only been this high twice; the 2000 dot.com crash, and the Black Tuesday 1929 historic crash (and it was only 30 then). Historically the market likes to be in the 15-20 PE range.

So until PE ratios come back down to sustainable numbers overall, we're going to see more and more stocks like AMD get slammed extra hard when they disappoint on numbers.
Posted on Reply
#29
bug
dozenfuryTbh the whole market is way overvalued right now. Check the Shiller PE numbers on the market, they are downright scary. Over 23 is due for correction and we're at 29.3. In fact it's only been this high twice; the 2000 dot.com crash, and the Black Tuesday 1929 historic crash (and it was only 30 then). Historically the market likes to be in the 15-20 PE range.

So until PE ratios come back down to sustainable numbers overall, we're going to see more and more stocks like AMD get slammed extra hard when they disappoint on numbers.
Maybe we should put a mechanism in place where companies will release their financials on a yearly basis, so we can match expectations to the real world from time to time? ;)
Posted on Reply
#30
Easo
Stock market being a stock market as usual. Kneejerk reactions to everything.
Posted on Reply
#31
phanbuey
EasoStock market being a stock market as usual. Kneejerk reactions to everything.
yep... actually not a bad time to buy them, now that they are back down from the stratosphere.
Posted on Reply
#32
Fx
trog100some say the entire stock market is in one huge over inflated bubble and due for a big come down..

if this happens i suppose it will start with the weaker players.. AMD being one of them..

trog
Quite a few say this and as self-made millionaires. We are long over due for another plunge; this next one will be the largest.
Posted on Reply
#33
efikkan
Well, this is more a normalization of overinflated stock than anything.
Posted on Reply
#34
natr0n

The word Nosedive always reminds me of this ^
Posted on Reply
#36
Fluffmeister
Heh, after nVidia's "tumble", AMD always have to go one better!

And that was after posting record revenue, hey ho markets and all that.
Posted on Reply
#37
Xzibit
FluffmeisterHeh, after nVidia's "tumble", AMD always have to go one better!

And that was after posting record revenue, hey ho markets and all that.
Stock market adopted Async Compute or they are using Vulkan. Nvidias tumbling performance is not optimal. Probably have to wait on the Stock Tumble Ready Driver and then the Hot Fix to get good tumbling performance.
Posted on Reply
#38
thesmokingman
This started before with Goldman downrating AMD just before the earnings call for no reason. They did the same thing to Tesla and their stock blew up afterwards. Not saying this will repeat with AMD, but Goldman they are usually upto smelly things. And is it me or is it just like with that driver with the shortcut thing, some kind of weird schadenfreude thing going with AMD.
Posted on Reply
#39
HTC
I found this to be informative:

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