AMD Drops 24% After Low Revenue And Guidance, Crypto Crash

Seems AMD never got its bread and butter GPU's back to original asking price. The RX 570 launched at $169 but still hovers around $200. This not to mention the need for a discount due to GPU's age. AMD made it easy for cryptocurrency GPU's to be sold on ebay at their once regular price. The RX 580 has only recently returned to its regular price for the 8 GB version. For the past 2ish months the RX 580 4GB version had hovered around the price point of the 8GB version. This played into Nvidia's hands as the 1050ti has been occupying the RX 570 price point for months. Nvidia had the Turing coming so they was happy to focus on getting their high end cards back to regular price. I can only guess AMD expected cryptocurrency to pick up again.
 

s1mon7

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Still not bad, shows that their CPUs are going strong.

They clearly need a new Zen in the GPU space. Something that could be competitive across all tiers, not just lower mid-range. I understand that they had to make major compromises before, but now they seem to be in a position to invest back into their GPUs. The high end is where the margins and brand-building products are. I think Nvidia gave them an opening by making their lowest raw performance increase over time with Turing (while costing Nvidia much to manufacture and taking a hit to power efficiency). I hope AMD have something around the corner to take advantage of that, as with future Nvidia gens likely being faster and Intel entering the GPU space, AMD won't have a better time to strike back than now.
 

SkyBill40

Honorable
It doesn't help when there are speculators in the financial industry who are essentially sabotaging AMD's position and earnings by making negative projections about them in opinion pieces and heaping praise on Intel when the latter hasn't done anything but struggle as of late. Where's 10nm? Where's the new architecture?

The tech industry apparently hasn't any interest in seeing AMD succeed and Intel fail. Anything and everything to keep Intel at the top or so it would seem.
 

mindbreaker

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AMD at a fantastic bargain. They miss revenue expectation by 14% so they drop 31%...how does that fit? I think we will be getting that 17% back soon. Cripto was blown way out of proportion. It was low single figure % of sales last time, not a big deal if that is lower. Other things were up above expectation like the enterprise embedded and semi-custom sales which was $715 million, while $653 million was expected.

I bought after hours.
 

mlee 2500

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Probably not a bad investment...I'll admit that I considered it when I saw the ticker today.

What's attractive to me is that there are so MANY ways this company can have an upside if they just execute; they could make serious inroads in the data center, they could possibly become performance-competitive with Intel in the higher margin end of consumer desktop silicon, they are still a recognized brand in the GPU market if they can just regain product parity with the competition, they seem to be developing the same sort of lucrative IP licensing revenue model which has worked out so well for Qualcomm, and the console SOC market is theirs to lose.

Of course execution is the key phrase here, and semiconductor development is an expensive and complicated proposition, even if you're fabless. So much so that a "mere" $1.6BN in revenue might not be enough to pursue all the opportunities they have in front of them. Their competitors either have a narrower product focus (NVIDIA), or ALLOT more cash to invest (Intel). Heck, NVIDIA has both of those things.

Still, AMD has come to market with a remarkable array of diverse products with apparently allot less investment. As someone who has worked in that space I'm not certain how they do it.
 
All of American companies are in trouble right now with 6 days straight of declining Nasdaq.
AMD is not falling because of just missed targets, it is being exagerated by the collapse of the current trading being done in America.
 

bit_user

Splendid
Herald

They're not "in trouble" because of that. The valuations were too high. This is simply an overdue market correction.

AMD, in particular, was priced virtually beyond perfection. In other words, they had no plausible path towards a P/E that would justify their recent valuations. Even after the drop, it's probably still overvalued.
 

bit_user

Splendid
Herald
BTW, GPU makers getting caught out by the inevitable crypto crash should've surprised exactly no one.

Anyway, just imagine how much worse it could've been if Nvidia launched a 2060 or 2050 GPU that were competitively priced.

IMO, Vega is probably AMD's biggest pain point. I feel like Polaris is still competitive in the lower-end, which is probably why they're doing a refresh.
 

nsomniac

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Apr 20, 2015
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They should just invest 200billion into crypto, it would drive the price of the currency and encourage more growth in their GPU business, it would also be a good show of faith in something that causes people to buy the cards hand over fist
 

bit_user

Splendid
Herald

They do not have $200B.

Only 2-3 years ago, they had to sell their CPU IP to Chinese companies for a mere ~$500M, just to raise enough funds to bring Ryzen to market.

https://www.tomshardware.com/news/amd-zen-launch-2016-2017,32314.html

And there's no way they'd get a return on that investment. Crypto (in its current form, at least) is a basically a ponzi scheme.
 

bit_user

Splendid
Herald

The problem is that every one of those markets has serious competitors.

You have POWER, some ARM, and some RISC V plays (plus a rudely reawakened Intel) gunning for the cloud CPU market.

In terms of GPUs, I think AI is nearly at a post-GPU threshold. So, that just leaves the consumer graphics and HPC markets. And AMD doesn't have a strong presence in HPC, plus there is a whole new wave of competitors for that market (some of which are government-backed and don't even need to be cost-effective to lock up certain markets, as many countries are now scared of US trade sanctions).

In the laptop space, ARM's A76 cores might finally start to be a viable x86 alternative. That would pave the way for more ARM-based Chomebox-type appliances to eat further into the desktop market, as well.


What they managed with Zen is truly impressive. I'm dearly hoping their 7 nm is a worthy second act, and I'm hoping they're close to launching a Zen-equivalent for GPUs. But they face a lot of headwinds. It will not be an easy road for them.
 

alextheblue

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I dunno, a Vega 56 isn't terrible at ~$400. Sometimes less. That's within ~$20 of 1070 non-Ti pricing.

Still, a replacement is going to be a while coming, and that's unfortunate. I understand why they are focusing on the professional market with early 7nm, but it still sucks. A 12nm refresh of both Polaris and Vega models would be nice. Might happen for Polaris, probably not for Vega.
 

nOv1c3

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The whole market has a drop . It all come down to the mid term elections , The market is spooked by the BS fake news that the democrats may take over the house and if they do take over you can expect the worse
 

johnrob

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Nov 22, 2014
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<quote>The market is spooked by the BS fake news that the democrats may take over the house</quote>

Why are they spooked if it's fake news...?

Anyway I think AMD's biggest strength is perceived price to performance value...that sort of goes directly against high profit margins. Its unlikely that they can survive by selling VEGA at a reasonable value...AMD really needs a GPU that is better than the rtx 2080. The market has proven that there are idiots out there that will pay $1000+ for a gaming GPU so they need to focus on getting those idiots to switch from nvidia.
 

shrapnel_indie

Distinguished


I can't say how much of that is fake news, but it does have republicans crying out for donations as democrats seem to be raising more funds. They easily ignore that Clinton raised more $$$ than Trump, and still lost in the end... and that according to polls, Trump's approval rating is up. but we digress here into the dangerous waters of politics... so back on track we go...


AMD's continued focus on improving profitability and focusing on a richer product mix will pay off in time, but investors are obviously looking for shorter-term gains.
Investors are always looking for a fast buck, at least in general. They've digressed from the long game to the short game... sadly it can enable things like the Enron situation a few years back.

Outside of market adjustments, those who invest based on AMD's improvements, and prefer at least some long-term investments, may have a good opportunity with the adjustment as Intel is still somewhat scrambling with its vulnerability issues (which they may have worked out... at least until tested well enough in the wild) and the rather larger problem of product availability. This of course still hinges on how well they both play their cards.

Note: Im probably speculating more than the pros, but still, the pros speculate and have their own favoritism come into play.
 
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im a miner in a rx 470 oc edition 4gb, and last years i was looking for some gpus.. i did not buy them n now i saw it was a very good choice .... now a days im just mining PIRL and those ASICS destroyed all hope for us, small miners.... prices drops its a good deal because my brother has a rx 580 n will upgrade, so i will get his gpu for mining n having some fun ... AMD n Itel r not our friend, they r globalists n they want cash,, the dont compete n dont really care if u gonna buy or not ,,, we need more competitos to be a capitalism true marketing ... ty
 

TMTOWTSAC

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Long term investors aren't usually fazed by the usual ups and downs. But a lot of short term investors bought AMD stock when it was trading around $10, so it would make sense for those investors to feel as though it had peaked. Short term investors are always looking for the next big score, so they're constantly moving their investments around trying to catch a wave. And tariff/trade uncertainty has caused a lot of volatility in the markets they've hit, or could potentially hit.
 

AnimeMania

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One space where they lack serious competitors is essential components for the video game console market. I wonder if they could leverage that into massive video card sales. What if they could make it so that ports of games from XBox and Playstation were relatively minor tweaks to run on AMD video cards, but massive rewrites to run on NVidia cards and Intel CPU chips. This might be just an AMD-only chip they integrate into the GPU similar to how AMD will never be able to replicate how the DLSS chip works in NVidia products. The video card market seems to be bifurcating, so it might be a good time for exotic ideas and see where the dust settles.

If AMD is drowning in Vega 64's, I will take one off your hands for 300 bucks.
 

redgarl

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AMD will need to make a bundle with special prices for liquidating their Vega stock. Nvidia was in the same situation not a long time ago, but I though Su played that game better than that. I think it is one of her real mistake, however, AMD is in the green and made 100 millions this quarter and they did take some ground from Intel in CPUs. It is going to be even better next semester, but the turn around will be how investors see Ryzen 2, Vega 7nm and Navi and CES.

Lots of challenge ahead of them, but I do believe this company can shift the inertia of the business altogether.

I was pissed off at the stock yesterday because I didn`t wanted to sell 32-34$ because I do believe that 7nm in the present situation will really be a game changer. I am betting on this. However, I got in at 9$-11$. Basically, I am not going to lose anything.

Ah well, it is an investment lesson there. Don`t hold your stock blindly, it is good to be patient and to wait for real deal. Been patient is rewarding. If you think you can make a good deal right now, you might be surprised tomorrow. Just know at what price you want to get in and snipe the stock for the best price you believe you can have. Analysts are good indicators, but on this one, nobody predicted this. Stock price always come back and forth in the short term.... or almost. I thought with AMD it would have been different, that the market really beat the shorters... now they are laughing at us.

However yesterday, Nvidia lost 10% of their value to. It was the worst day for tech stock in a long time. The Nasdaq lost 4%, it was bad.
 

alextheblue

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Apr 3, 2001
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I think the claims they are selling it below cost are inaccurate, but Vega's margins are likely thinner than Polaris.
 

bit_user

Splendid
Herald

First, AMD does not own the IP in the video game consoles. So, it can't just decide to take an existing console APU and put it on a card. They would have to duplicate the work they did for MS/Sony to design and build those APUs, and they still wouldn't have the rights to reuse the DRM needed to natively run console games on them.

At a higher level, I am told that people who do PC/console ports of games are rarely the original developers. That work is often farmed out to a separate firm, who might end up rewriting large parts of the code. This basically shatters the idea that a game well-optimized for one/both of the consoles will automatically run well on a AMD-powered PC.

The best thing AMD gets from its console business is probably the kind of early, in-depth feedback from MS, Sony, and teir-1 console game developers about their hardware. This can help inform their PC GPU business. Of course, both consoles are using GCN, so the amount they can change is probably somewhat limited. Maybe we'll see the ultimate form of this in NGC (their post-Navi new architecture).
 

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