Friday, August 10th 2018
Goldman Sachs Upgrades Stock Ratings for AMD, Downgrades Intel to "Sell"
Goldman Sachs, citing problems with Intel's 10 nm manufacturing process delivery - which was supposed to be available in the market for years now - has reduced the blue giant's stock rating. Previously at a "neutral" stance - already downgraded in the face of Intel's manufacturing woes - the stock is now at a "Sell" level. Even though Intel is still outperforming the S&P 500's 6.7 percent return with their (current) 8.6 percent this year through Thursday, the outlook isn't good for the company.
As to AMD, Goldman Sachs has a much more positive outlook, moving the company's shares from the "sell" rating it was in to a "neutral" stance. Citing belief in increased server and consumer market penetration with AMD's products in the next two years: AMD's server chip market share will rise to 5.1 percent in 2019 and increase to 9.4 percent in 2020 from an estimated 2.2 percent this year.
AMD's stock was - and likely still is - terribly undervalued for the company's IP and expertise - the underdog terminology has served to put the company's outlook in a much more negative view than it needed to be - this still is the only second company that's capable of designing x86 chips, and let's not forget how it's been delivering on that front in no shy means in the last two years. Owing to that same undervaluation, though, AMD's stock has risen 85.8 percent this year through Thursday versus the S&P 500's 6.7 percent return. The chip stock's performance ranks as the second-best return in the S&P 500 this year.
Sources:
CNBC Intel, CNBC AMD
"We see Intel's struggles with 10 nm process technology having ramifications in terms of its competitive position - across a broad set of products. While the 10nm push is well-publicized at this point, we believe Intel's manufacturing issues could potentially be deeper-rooted than what most think and could have a sustained impact on market share and/or spending levels as Intel competes with a growing/stronger TSMC eco-system."
Goldman Sachs Analyst Toshiya Hari
"We find it increasingly harder to argue our prior bear thesis - even following the recent stock price move - given Intel's struggles with 10nm process technology. The delay in Intel's new products will allow AMD to gain share in not only client (i.e. desktop PC, notebook PC) CPUs, but also in the lucrative server CPU market."
Goldman Sachs Analyst Toshiya Hari
47 Comments on Goldman Sachs Upgrades Stock Ratings for AMD, Downgrades Intel to "Sell"
The potential is massive.
Intel will not only get the scoop on what AMD was able to do, but will now be able to swing its billions in the right direction. Keller oversaw the birth of zen and athlon on a shoestring budget... intel is sitting on a few aces... unless they really play this wrong they will come out on top.
"I know yuotubers use seem to have odd issues once in awhile with Ryzen"
And Youtubers who use Intel have issues once in a while too. For multithread-supported productivity, Ryzen is the good to go at a price/performance ratio. And for Youtubers, that's usually what matters.Everything is relative. GTX 1070 reviews said it is overkill. As they weren't thinking of high refresh monitors, as for most of the gamers 60 fps is totally enough. So I think you are wrong with the claim "most of us here these days". Just check the numbers. Nearly twice as much GTX 1060 is sold than GTX 1070, 1080 and 1080Ti together. And GTX 1060 is not bought by people playing browser games. :)
He could very well leave Intel and go back to AMD in 2 years just when they may (but they may not) need a little "pick me up" in their road map.
It looks very like the Zen road-map extends to at least Zen 5; given Ryzen gen 2 is Zen 1.5, they could well have competitive stuff in the pipeline until at least 2022 and can pull things in a bit if the competition heats up.
So if JK went back to AMD again (with any new ideas he had for the next thing after what he did with Intel) in 2020 or 2021 that could keep AMD competitive/ahead for another 3 or 4 years.
The least what then would going to happen, will be, that they have had to hang up their foundry-business completely – as no-one in this business is ever going to a) accept their lack of reliability or b) would trust any of their promises in terms of fabbing chips, yields, schedules or similar in general ever again (which seems to be already the case, given that more and more partners jumping their ship lately and they have less and less partners which are willing to have their chips produced using Intel's nodes ...).
But hey, we're still talking about Intel. A semiconductor manufacturer and the most iconic chip producer in history, who consider themselves being the biggest chipmakers since the invention of electricity. Apart from that, there would be some rather real chances for massive Chinese industrial espionage, the most sacred of Intel's crown jewels: their state-of-the-art processors and elementary x86 IPs.
So, before something like that is going to happen, I don't know ... It'll be a cold day in hell when that happens.
www.fool.com/investing/2018/07/17/a-sneak-peek-at-intels-q2-2018-earnings.aspx
www.intc.com/investor-relations/investor-education-and-news/investor-news/press-release-details/2018/Intel-Reports-Second-Quarter-2018-Financial-Results/
It's just that Glofo / TSCM are ahead compared to Intel, and AMD did create a very good and solid CPU which is capable of scaling up to 32 cores / 64 threads without costing a fortune to produce. From every slice of silicon they have, they sort out the best working parts and put it on the TR series, the less qualifying chips to Ryzen and so on. Nothing is lost in the proces and AMD is able to milk as much as possible from every silicon.
This is what they needed, that impulse. Otherwise if there would be another Bulldozer AMD was forced to be another VIA in the market, just putting out embedded products and nothing more.
Now if AMD was able to put a outstanding graphics card / compute card back on the market again then things would be very brightfull for the company in the future.
Most are forgetting that nodes never deliver their potential from day one. The mature 7nm with good yields in volumes will be the 7nm+ nodes, which GF and TSMC expect to start producing late 2019/2020, and that's assuming they are successful with EUV. TSMC seems to be first at 7nm, but we have to remember that Nvidia have most of the volume booked here, so AMD would have to carefully select which products to prioritize. In the beginning, the process will be slow due to the complex patterning, we should expect AMD to prioritize premium products first, then gradually ramp up production. It's highly unlikely that AMD will be able to flood the CPU market with 7nm products before Q3 2019. When Intel hits their yield target, their massive production capacity should be able to deliver higher volumes than AMD can dream of.You should be careful, fragile minds might not handle the truth that well ;)
There are no problems Intel has at the moment that could not have been addressed this way.
Long term Intel Fab vs TSMC&Co fabs is a different discussion.