News AMD's Market Cap Surpasses Intel

[Admin]

AMD's Market Cap Surpasses Intel : Read more

 

[helper800]

Yeah... one of those cases when Wall Street valuations don't match the real world at all.

Intel 2021 Revenue: $79 Billion
AMD 2021 Revenue: $16 Billion

Intel 2021 Profit: $19.9 Billion
AMD 2021 Profit: $3.2 Billion

Intel Total Assets: $168 Billion
AMD Total Assets: $12 Billion

Intel x86 Desktop CPU Market Share: 84%
AMD x86 Desktop CPU Market Share: 16%

Intel x86 Laptop CPU Market Share: 78%
AMD x86 Laptop CPU Market Share: 22%

Intel x86 Server CPU Market Share: 89%
AMD x86 Server CPU Market Share: 11%

Intel has physical Fabs, AMD has none.
Intel has a new GPU product line coming out to compete in a new market segment for them.

I like AMD, but no way they should be valued higher than Intel.

How much people value a company at has never been tied to their assets, revenue, profit, or even market share within their industry. Stock market valuation is how people "feel" a company is doing.

 

[Chrys]

How much people value a company at has never been tied to their assets, revenue, profit, or even market share within their industry. Stock market valuation is how people "feel" a company is doing.

Tesla anyone?

Yeah, the feels for value just hurts my head.

 

[TerryLaze]

How much people value a company at has never been tied to their assets, revenue, profit, or even market share within their industry. Stock market valuation is how people "feel" a company is doing.

Both are existing options, people that do investing very much tie value to assets, revenue, and so on, they buy shares because they believe that the company will do even better in the future increasing the value of the share.
People that do gambling go by "feels" or even pump up a share they bought cheaply to drop them on some fool at a multiple of what they payed for it, gamestop anyone?!

 

[-Fran-]

How much people value a company at has never been tied to their assets, revenue, profit, or even market share within their industry. Stock market valuation is how people "feel" a company is doing.

While I don't disagree at a high level, the devil is always in the details.

As pointed out in the article, most of what makes AMD valuable are their decisions and overall direction. Even if Intel is 10x the size of AMD and still makes about 10x of revenue, if the direction they're showing to investors is that of stagnation (not growing) or slowing down (slow growth), it will impact its valuation. Then there's the actual financial numbers and how they interpret all that data via projections; there's plenty scores companies get based on performance and trends in different markets they participate it vs their competition. It's stupid/strange for most of us, but that's how it goes.

Regards,

 

[korekan]

ah come on its a good news. otherwise if there is no competition the bigger manufacturer will keep the stagnant product flowing for awhile.

 

[Bazzy 505]

Yeah... one of those cases when Wall Street valuations don't match the real world at all.

Intel 2021 Revenue: $79 Billion
AMD 2021 Revenue: $16 Billion

Intel 2021 Profit: $19.9 Billion
AMD 2021 Profit: $3.2 Billion

Intel Total Assets: $168 Billion
AMD Total Assets: $12 Billion

Intel x86 Desktop CPU Market Share: 84%
AMD x86 Desktop CPU Market Share: 16%

Intel x86 Laptop CPU Market Share: 78%
AMD x86 Laptop CPU Market Share: 22%

Intel x86 Server CPU Market Share: 89%
AMD x86 Server CPU Market Share: 11%

Intel has physical Fabs, AMD has none.
Intel has a new GPU product line coming out to compete in a new market segment for them.

I like AMD, but no way they should be valued higher than Intel.

My thoughts exactly.

Let's just hope AMD didn't take a bite too big to swallow with Xillinx like it did 15 years ago with ATI. If you take a closer look at AMD balance sheet it looks like they might have. Back then it really ended AMD's winning streak which was very similar to success to they have had with Zen in the last few years.
AMD has a tendency to think really big the moment they get out of red. The problem is market cap without assets backing them has a tendency to come and go. Blame it on wall street's never ending pump and dump schemes.

Having said that i really hope AMD can keep their nose above the water this time. Whenever Intel competes with nobody but themselves, value for money for us customers tends take a deep dive. Whenever AMD gets more than 10% on server maketshare, Intel chipzilla wakes up and pulls a rabbit out of their hat, and we get 3 - 4 years of having 2 brands putting out great products at great prices.

 

[Jimbojan]

It is completely illogical that AMD has higher market value than Intel, it is the act of those analyst, it will be a fool to follow that theory. Just watch AMD to go down to oblivion as it has inferior products comparing to Intel's now.

 

[Rack1600]

Yeah... one of those cases when Wall Street valuations don't match the real world at all.
...
I like AMD, but no way they should be valued higher than Intel.

Share value is based on buyer's perceived future value.
Year-on-year increase in Revinue
Intel:
17-18: 12%
18-19: 1.5%
19-20: 8,2%
20-21: 3,4%

AMD:
17-18: 23%
18-19: 4%
19-20: 45%
20-21: 68%

As you can see, AMD has found a major growth path - one that stock owners think can result in AMD being the same size as Intel. That's what it means - stocks go up based on potential future earnings.

Anyone comparing AMD to Tesla needs a reality check. Tesla doesn't have the same market capital as one of it's main competitors (e.g. Toyota). It has the same market capital as all of it's competitors combined - which means that share-holders of Tesla must believe either:

1. that Tesla can potentiall earn more than the entire car industry can today
2. the Tesla share price is not bound by any sane measure of future value, and will still somehow increase in the future anyway

 

[semitope]

AMD has been doing a lot a share buybacks recently and that raises the stock value too. Honestly, I don't think this is the time for AMD to take their foot off the gas, Intel seems to be waking up. They should have put that money into more R&D instead of stocks.

but that's how it goes. You have to start pandering to "investors" when your stock price is ridiculous an the people still aren't happy with it. They want 2x, 3x. AMD has to start doing things for investors that will hurt their business.
Yes they are already on the defensive on client cpus. Their big advantage on servers is core count and intel has chiplet response.

 

[semitope]

Share value is based on buyer's perceived future value.
Year-on-year increase in Revinue
Intel:
17-18: 12%
18-19: 1.5%
19-20: 8,2%
20-21: 3,4%

AMD:
17-18: 23%
18-19: 4%
19-20: 45%
20-21: 68%

As you can see, AMD has found a major growth path - one that stock owners think can result in AMD being the same size as Intel. That's what it means - stocks go up based on potential future earnings.

Anyone comparing AMD to Tesla needs a reality check. Tesla doesn't have the same market capital as one of it's main competitors (e.g. Toyota). It has the same market capital as all of it's competitors combined - which means that share-holders of Tesla must believe either:

1. that Tesla can potentiall earn more than the entire car industry can today
2. the Tesla share price is not bound by any sane measure of future value, and will still somehow increase in the future anyway

you cant directly compare year on year revenue increases when one company was making a small % of the other's revenue. Though I guess that doesn't matter as long as the perception people have drives the stock price up. its also interesting that 20-21 were pandemic + crypto + next gen console surge years.

It's all down to making people feel good about it

 

[Makaveli]

It is completely illogical that AMD has higher market value than Intel, it is the act of those analyst, it will be a fool to follow that theory. Just watch AMD to go down to oblivion as it has inferior products comparing to Intel's now.

Inferior products like its Epyc line?

 

[helper800]

Both are existing options, people that do investing very much tie value to assets, revenue, and so on, they buy shares because they believe that the company will do even better in the future increasing the value of the share.
People that do gambling go by "feels" or even pump up a share they bought cheaply to drop them on some fool at a multiple of what they payed for it, gamestop anyone?!

At the end of the day after all the evaluations of said statistics it comes down to how someone "feels" the company is going to do in the future. Nobody has a working crystal ball. There was a study done that showed a cat randomly selecting stocks got 10.8% returns while professional financial groups only got 3.5%. This is to say randomly selecting a diversified portfolio can do just as good if not better than the people who supposedly know what they are doing.

 

[TerryLaze]

At the end of the day after all the evaluations of said statistics it comes down to how someone "feels" the company is going to do in the future. Nobody has a working crystal ball. There was a study done that showed a cat randomly selecting stocks got 10.8% returns while professional financial groups only got 3.5%. This is to say randomly selecting a diversified portfolio can do just as good if not better than the people who supposedly know what they are doing.

Because for stable companies that professionals would go for around 3% growth is already considered good, that's what you should expect when investing, a small but pretty sure gain, while choosing randomly you might get 10% returns, you might get way more than 100% or you might loose 100% ,choosing randomly is not much worse than gambling.

 

[helper800]

Because for stable companies that professionals would go for around 3% growth is already considered good, that's what you should expect when investing, a small but pretty sure gain, while choosing randomly you might get 10% returns, you might get way more than 100% or you might loose 100% ,choosing randomly is not much worse than gambling.

The thing that was not mentioned is that professionals lose all the time as well. I can buy municipal bonds that are FDIC insured and guaranteed at 5% returns. Why would I even bother with letting other people gamble my money at 3-4%? Just on the outlier case of them getting 8-15% return one year? Choosing randomly may be closer to gambling but also less at the same time. When you choose randomly there is no bias in your picks, whereas, when you pick them intentionally there is a bias which is closer to the side of gambling.

 

[janfreddy]

AMD has been doing a lot a share buybacks recently and that raises the stock value too. Honestly, I don't think this is the time for AMD to take their foot off the gas, Intel seems to be waking up. They should have put that money into more R&D instead of stocks.

Since 2017 the amount of outstanding stock has increased by 27% from 942 million to 1.2 billion. Yes amd has reduced the number of outstanding shares by about 1.3% in the last 10 months. That but negligible compared to the 27% new outstanding shares that was issued in the 4 years prior. Also the Xilinx aquisition dilutes the share even further with over 35% more outstanding shares.

Amd has increased the R&D spending from about 1.98 billion to 2.85 billion USD in the last year alone. I would guess they are increasing the R&D spending as fast as they can without wasting money.

 

[samopa]

Somebody please tell me, what is the impact this record breaking news to the AMD itself ?
AFAIK, AMD only get the money when the do the IPO, after that, any changes in stock prices only benefit anyone that sold the stock higher than the bought it, but I could be wrong

 

[helper800]

Somebody please tell me, what is the impact this record breaking news to the AMD itself ?
AFAIK, AMD only get the money when the do the IPO, after that, any changes in stock prices only benefit anyone that sold the stock higher than the bought it, but I could be wrong

The company's people probably own a lot of AMD stock so they must be doing well.

 

[janfreddy]

Somebody please tell me, what is the impact this record breaking news to the AMD itself ?
AFAIK, AMD only get the money when the do the IPO, after that, any changes in stock prices only benefit anyone that sold the stock higher than the bought it, but I could be wrong

Market capitalisation is one of the factors that impacts credit-worthiness and therefore the interest rate and amount of debt a company could take on. Also executives and often normal employees are rewarded with stocks or stock options. Usually those rewards are agreed a few years in advance so executives and employes are effectivly earning more. Also AMD could issue more stocks to raise capital or pay for an acquisition with stocks(as amd currently with Xilinx)

 

[samopa]

Market capitalisation is one of the factors that impacts credit-worthiness and therefore the interest rate and amount of debt a company could take on. Also executives and often normal employees are rewarded with stocks or stock options. Usually those rewards are agreed a few years in advance so executives and employes are effectivly earning more. Also AMD could issue more stocks to raise capital or pay for an acquisition with stocks(as amd currently with Xilinx)

So, no money (at least directly) flowing to AMD as a company (not the people at AMD who own stock) correct ?

 

[samopa]

The company's people probably own a lot of AMD stock so they must be doing well.

AFAIK, they will not get any money until they sell their stock, and when they do the will lost their grip (ownership) to AMD, and will not get any further benefits unless they're in trading business. please enlighten me in this matter.

 

[Co BIY]

AMD is on a roll and probably deserves a higher valuation than Intel as a multiple of revenue but this valuation is way out of line in my mind.

But if I'm so smart why aren't I rich ?


Some math that kind of changed my mind. (Not about me being smart)

AMD valued at 197 Billion = 11.6 x Revenue of 17 Billion (AMD+Xilinx)

That 11.6 multiple is not out of line with current semiconductor company valuations.

Intel's valuation at a 2.5 x revenue multiple is very low.

Maybe it is Intel that is severely undervalued!


Also AMD should get some credit for the possibility of replacing the Xilinx name which is an abomination.

 

[TJ Hooker]

I can buy municipal bonds that are FDIC insured and guaranteed at 5% returns.

Bonds are not FDIC insured. Nobody is getting 5% returns 'risk free' these days.

 

[TJ Hooker]

Because for stable companies that professionals would go for around 3% growth is already considered good, that's what you should expect when investing, a small but pretty sure gain, while choosing randomly you might get 10% returns, you might get way more than 100% or you might loose 100% ,choosing randomly is not much worse than gambling.

Average, annualized S&P 500 returns for the last ~100 years has been about 10% (not considering inflation).