Advanced Micro Devices AMD
May 04, 2000 - 12:44am EST by
paul111
2000 2001
Price: 43.88 EPS 1.43
Shares Out. (in M): 152 P/E
Market Cap (in $M): 0 P/FCF
Net Debt (in $M): 1,427 EBIT 0 0
TEV ($): 0 TEV/EBIT

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Description

For 1999 the total year revenue was 2.85 billion. First quarter of 2000
had revenue of 1.09 billion and normally first and second quarter are
the worst part of the year for semiconductors. With Earnings/share of
1.15 for Q1, annualized this gives a PE of 19. I expect earnings as
high as twice this. Keep in mind that because of high fixed cost, past
a break even point much of revenue is profit.

The market cap for AMD is 13 billion versus 396 billion for Intel. Based
on the impending growth rate for AMD, on basis of market cap, I would target
50 billion market cap if AMD merely executes on their current plans.

Main reason for this pick is that I am a computer geek. I spend more than
2 hours a day scouring news sites, AMD sites, hardware sites. I also
check the circulars every sunday to see what is being advertised. AMD
is nearing 50% of the retail market and once it begins to take share in
the corporate market should be able to reach it's goal of 30% overall
market share(17+% now) by the end of 2001.

http://www6.tomshardware.com/column/00q1/000209/ is the link to one of
the best technological analysis of why AMD will do well. It is the
final straw that led me to invest 100% of my portfolio in AMD as well as
to get 27 friends/family/coworkers to invest in the low 50s. Of 38 tech
stocks which I track it is the ONLY one to break a new high since the
friday crash, with the next closest being about 10% down.

Once thunderbird and duron are realeased they will compare very favorably
to intel products until at least november when williamette is released.
Intels IA-64 platform uses an unproven new technology which is not
natively compatible with existing 32 bit applications. This will require
emulation which will make it slower on existing hardware which could create
a situation much like when the pentium pro was slower than pentiums for
16 bit software.

Besides the technology is the human factor. AMD is used to competition
and if the recent Intel mistakes of the last 6 months are any indication,
Intel is not. You could say AMD has the eye of the tiger, always being
on the edge of destuction has created a company of battle hardened veterans.
There are rumors that intel has become an terrible place to work and as
a result there has been a brain drain that went to AMD. AMD also has
some of the key people who developed the BEST processor ever created,
DEC's Alpha. Consumers never heard of it, but geeks have. Much of this
technology is in the Athlon. These human factors are most obvious when
you consider AMD received more patents in 1999 than Intel! Then keep in
mind Intels treatment of vendors in the past. With such perferential
treatment of Dell, leaving some suppliers without enough product this has
been good for AMD, especially with their new fab coming on line. A fab
which has been critized for the years when it was being built because it
wasn't going to be needed. Guess what, it is.

This is the first time Intel has had complete competition across all
market segments so they cannot pursue thier old tactic of a price war
on the low end by subsidizing it with profits from the high end. Intel
is also not focuses on chips and much of their resources are bent towards
entering into internet infrastructure. This is as close as you get to a
sure thing, but most investors are following traditional wisdom which
says Intel will trounce AMD with ease yet again.

Catalyst

The catalysts are many for this stock. The most important is past failures
and the false assumption that intel can just crush them yet again. After
all AMD is the ONLY opponent still standing against intel and many have
tried. Further cataylsts include the realization by the non-technical
people that RAMBUS is not the future, DDR DRAM is and that is the memory
that AMD is backing. AMD also has a much better 64 bit strategy which is
more doable as well as based on more proven technologies than intel.
    sort by    

    Description

    For 1999 the total year revenue was 2.85 billion. First quarter of 2000
    had revenue of 1.09 billion and normally first and second quarter are
    the worst part of the year for semiconductors. With Earnings/share of
    1.15 for Q1, annualized this gives a PE of 19. I expect earnings as
    high as twice this. Keep in mind that because of high fixed cost, past
    a break even point much of revenue is profit.

    The market cap for AMD is 13 billion versus 396 billion for Intel. Based
    on the impending growth rate for AMD, on basis of market cap, I would target
    50 billion market cap if AMD merely executes on their current plans.

    Main reason for this pick is that I am a computer geek. I spend more than
    2 hours a day scouring news sites, AMD sites, hardware sites. I also
    check the circulars every sunday to see what is being advertised. AMD
    is nearing 50% of the retail market and once it begins to take share in
    the corporate market should be able to reach it's goal of 30% overall
    market share(17+% now) by the end of 2001.

    http://www6.tomshardware.com/column/00q1/000209/ is the link to one of
    the best technological analysis of why AMD will do well. It is the
    final straw that led me to invest 100% of my portfolio in AMD as well as
    to get 27 friends/family/coworkers to invest in the low 50s. Of 38 tech
    stocks which I track it is the ONLY one to break a new high since the
    friday crash, with the next closest being about 10% down.

    Once thunderbird and duron are realeased they will compare very favorably
    to intel products until at least november when williamette is released.
    Intels IA-64 platform uses an unproven new technology which is not
    natively compatible with existing 32 bit applications. This will require
    emulation which will make it slower on existing hardware which could create
    a situation much like when the pentium pro was slower than pentiums for
    16 bit software.

    Besides the technology is the human factor. AMD is used to competition
    and if the recent Intel mistakes of the last 6 months are any indication,
    Intel is not. You could say AMD has the eye of the tiger, always being
    on the edge of destuction has created a company of battle hardened veterans.
    There are rumors that intel has become an terrible place to work and as
    a result there has been a brain drain that went to AMD. AMD also has
    some of the key people who developed the BEST processor ever created,
    DEC's Alpha. Consumers never heard of it, but geeks have. Much of this
    technology is in the Athlon. These human factors are most obvious when
    you consider AMD received more patents in 1999 than Intel! Then keep in
    mind Intels treatment of vendors in the past. With such perferential
    treatment of Dell, leaving some suppliers without enough product this has
    been good for AMD, especially with their new fab coming on line. A fab
    which has been critized for the years when it was being built because it
    wasn't going to be needed. Guess what, it is.

    This is the first time Intel has had complete competition across all
    market segments so they cannot pursue thier old tactic of a price war
    on the low end by subsidizing it with profits from the high end. Intel
    is also not focuses on chips and much of their resources are bent towards
    entering into internet infrastructure. This is as close as you get to a
    sure thing, but most investors are following traditional wisdom which
    says Intel will trounce AMD with ease yet again.

    Catalyst

    The catalysts are many for this stock. The most important is past failures
    and the false assumption that intel can just crush them yet again. After
    all AMD is the ONLY opponent still standing against intel and many have
    tried. Further cataylsts include the realization by the non-technical
    people that RAMBUS is not the future, DDR DRAM is and that is the memory
    that AMD is backing. AMD also has a much better 64 bit strategy which is
    more doable as well as based on more proven technologies than intel.

    Messages


    SubjectAll my eggs are in this basket
    Entry06/02/2000 03:02 AM
    Memberpaul111
    Move to socket lowers cost. New processors released this month. Is ahead of Intel in the migration of .18 micron and copper interconnects. Regardless of the Coppermines, Intel still uses Aluminum. AMD Copper Athlons should be out any time, making AMD the third company to do so behind IBM and Motorola. While Intel has stated that in general semiconductors underexpanded their production, AMD was building its second fab in germany and is poised to take advantage of intel supply problems to high effect. There are many more, but I don't have any more time.Hold onto your hats boys and girls. Behold the only tech stock I know of that is both a value stock and a growth stock. You will look it up on Yahoo or wherever and you will say, but Paul it has a PE of 59. Sure it does, ON TRAILING 12 MONTHS. If you look at a forward looking it, is much different. I spend a lot of time every day keeping tabs on this company and I must tell you I am a computer geek, professionally and as a hobbyist. I also watch the market itself. This is the only stock I feel safe in given this volatile market. I have liquidated all my other stocks and maintain 100% AMD stock and call options. AMD is a leader in flash memory which is a critical component for cellular phones and networking equipment. They multi-year contracts with Cisco, Alcatel and Samsung. Their partnership with Fujitsu, FASL produces the highest quality flash, sold at even higher prices than for Intel. The AMD athlon is a superior product to the pentium 3. I expect problems with both williamette and itanium, which will leave Intel with difficulty being competitive on the high end until at least Q2 2000. As long as AMD has no excution problems, they should outpace Intel in their roadmap on the short to intermediate term. They are on target for 30% market share. AMD may even beat their own target of 30% market share by the end of 2001. For a good article with details, see http://www6.tomshardware.com/column/00q1/000209/index.html My target price for end of jan 2001 is 350, based on my expectations of earnings of $10/share with a PE at that time of 35. This is in contrast to soloman smith barneys target of $5.50 a share earnings. The stock should split soon for the first time in 17 years. Based on the current stock price of 83.5, that gives a forward looking PE of 15 based on SSB numbers and 8.35 based on my numbers. One extremely important thing to remember on earnings is that because of the high fixed cost, if you double revenues, you might have 5 times higher earnings. Once you get above breakeven much of revenue is profit. To give an idea where my personal estimates have been in the recent past for AMD, my end of april target was 90 and the actual high at the end of april was 88 7/8. For earnings analysts were expecting .58 and I was initially expecting 1.20, although after the preannouncement, I reduced that to .80 and the actual earnings were 1.15 ... So my numbers were extremely close, slightly on the optomistic side. This recent downturn has been disturbing, but is not based on fundamentals. More likely it was based on technicals and an institutional fund deciding to make an exit. Another intersting link is http://moneycentral.msn.com/investor/research/wizards/SRWTarget.asp?Symbol=AMD and you will notice that if AMD were valued like it's peers (which none of us should touch as value investors) it would be priced at about $391 a share!!

    Subjectsalomon smith barney analysis
    Entry06/02/2000 03:14 AM
    Memberpaul111
    I'm not sure if it OK to do this, but I'm sure they'll let me if I can't. I cut this out to illustrate my point about the 5.50 earnings projections. Their comments about turning down dell are tremendous signs of where AMD is headed. I hope this isn't considered hyping, but I am trying to add more information by replying to my own messages. Also motherboard support seems to be even better than expected for the thunderbird/duron launch this month. Besides VIA, Ali is also working on Socket A based chipsets. I think SiS is also.

    SubjectYou know this better than me
    Entry06/04/2000 04:37 PM
    MemberSpocksBrainX
    If I am to accept this comment "Besides the technology is the human factor. AMD is used to competition and if the recent Intel mistakes of the last 6 months are any indication, Intel is not. You could say AMD has the eye of the tiger, always being on the edge of destuction has created a company of battle hardened veterans." Then why does Intel dominate in market share, have a FAR better balance sheet, and regularly posts annual yearly EPS totals which are higher than AMD ever posted in their lifetime? You aren't a bit concerned that the earnigns growth being posted here is like 91 to 95 and eventually things will go bad again?

    SubjectAMD
    Entry06/09/2000 10:32 AM
    Memberran112
    I have looked at the running earnings for AMD. In the quarter that is underway, I anticipate $1.50 per share. The most agressive analyst on wall street is only anticipating $1.16. The street has a very conservative bias towards earnings on AMD for two reasons. 1. The firms that follow AMD have assigned junior semiconductor people, and their seniors staff follow Intel. 2. They have been wrong on AMD in the past, and are afraid to disappoint the public. My own view is that AMD will be eventually selling for $150 U.S. per share, or $75 per share after an anticipated 2 for one split in late summer-early fall.

    SubjectThings have changed
    Entry07/08/2000 11:21 PM
    Memberpaul111
    well paul118 what you have to understand is the reason WHY Intel has always been able to take AMD out with a price war when they were doing too well was because AMD only lived in the low end. This was a result of them licensing technology from intel, which meant they would always be behind. Once Intel forced them to develop their own technology they did a good job at it. Keep in mind that AMD earned more patents than Intel last year. As a result AMD can compete across the entire line of PCs other than the server market and that will happen by the end of the year as well. The reason why Intel dominates in market share is they are institutionalized and with 17 fabs have the largest capacity of any company producing microprocessors. AMD is still not a proven quantity in the commercial market, where a price advantage is not enough like it is in retail. This will basically take time. The initial penetration of the commercial market has started and will likely take 6 months to a year. Even at full capacity AMD can only handle 20% market share or so. At the end of the next year they could do as much as 35% of the market. The reason is that while the rest of the semiconductor firms underinvested in capital expenditures, AMD was building its Dresden fab which officially went online June 6. As you probably know it takes 1-2 year after starting a fab before you can start shipping products and then problably another 1-2 years before reaching full capacity on the fab. What AMD has already accomplished is amazing. They have already broken through many of the barriers to entry and are positioned to make major strides. Keep in mind the $400 million in debt they are paying back and that their current cash is $900 million and another $350 million is coming from the sale of the communications division. The only way to win is with economies of scale and AMD is poised to use that.

    SubjectThis one needs significant res
    Entry08/29/2000 07:58 AM
    Memberalex15
    Recent events ============= - Intel just announced the recall of PIII 1.13 Ghz chip yesterday - Points to a very hastily arranged PR driven effort a month ago when the chip was introduced - 1.13 had been panned repeatedly by a number of hardware reviewers http://www.hardocp.com/articles/intel_stuff/1133mhz/index.html http://www.tomshardware.com/cpu/00q3/0008281/index.html Equity Impact ============= - Three stocks INTC-, AMD+, RMBS- - All trading at recent highs - AMD trading at 1/4 of the earnings multiple of INTC - What drives RMBS valuation is unclear Oustanding questions ==================== 1) How biased are the review boards (Tom's hardware, HardOCP, Hardware central) www.tomshardware.com www.hardocp.com www.hardwarecentral.com - Is unrealistic bias for Intel colouring the reporting? 2) Is INTC in fact (as reported) coercing equity analysts to publish EPS estimates INCLUDING the large Micron stock sale gain (distorts numbers significantly) http://www6.tomshardware.com/technews/technews-20000707.html#0704 http://quote.bloomberg.com/fgcgi.cgi?ptitle=Technology%20News&s1=blk&tp=ad_topright_tech&T=markets_fgcgi_content99.ht&s2=blk&bt=ad_bottom_tech&s=AOWT8VRZ3SW50ZWwg 3) Has INTC coerced, as reported, Investment Banks to split the coverage of INTC and AMD between senior and junior analyst (in order to minimize the impact of negative reporting) 4) Is Dell considering using AMD Athlon and Duron's at the risk of the priviledged Intel supply relationship 5) How well is the Dresden plant running? paul111 post 6) Is INTC really considering dumping RMBS and RDRAM? http://www6.tomshardware.com/mainboard/00q2/000529/ http://www.forbes.com/tool/html/00/may/0523/feat.htm 7) How ludicrous are RMBS' patent and royalty claims on SDRAM DDR-SDRAM http://www6.tomshardware.com/column/00q3/000719/ 8) How quickly can the Athlon credibly hurt Intel sales in the multi-processor segment? 9) Is Intel really considering scraping Itanium and how quickly could they come back with a backwards-compatible 64bit design (as AMD's is) http://www5.tomshardware.com/column/00q3/000822/bb-03.html#a_view_of_the_road_ahead_intels_roadmap_revealed 10) What is the word inside Intel? Overall ======= - There is a strong chance that the market has not fully priced the very possible risk to the Intel dominant position in the retail, corporate and scintific CPU market. - Backward incompatible Intel Itanium architecture may die from technical challenges-driven delays - RMBS ties to Intel seem to be loosening and valuation seems impossible to maintain - AMD likely largest beneficiary - If this break, it will be big (in terms of market cap swings) INVITE ANSWERS, COMMENTARY, SUGGESTIONS AND REVISIONS. PARTICULARLY USEFUL WOULD BE ANSWERS FROM THE TECHNICALLY AND SUBJECT PROFICIENT.

    Subjectyou are absolutely right alex1
    Entry09/02/2000 01:59 AM
    Memberpaul111
    You have made quite a number of positive points. A couple more things to add to your list. 1. The itanium is having trouble clocking up as high as expected and it will be released at 733 mhz initially instead of the 800 mhz promised. There are currently 6000 demo systems and they range in speeds between 500-733 with most being around 500 mhz. The cooling requirements on these processors are high and if you see pictures of them they look more like smaller refrigerators. Don't expect to see 1U or 2U cases that can hold an itanium any time soon!! This will not initially be some in decent volumes until most likely 2nd half of 2001. 2. The die size on the P4 (williamette) is over twice the size of the P3 die which means that they will have to half their production when switching to the chip. This will prevent volume from getting to mainstream levels until the switch by intel to the .13 micron process size, which will double their capacity. However to make the shift to .13 micron process it will likely require the use of copper interconnects, which AMD already has in production. Considering that the switch from .25 micron to .18 micron for intel is not yet complete, I find it unlikely that the .13 micron transition will complete in the middle of 2001 as projected. There are even unsubstantiated rumors that the P4 will start on .25 micron. If this is true, things are even worse for intel than expected. The performance should take a 20% penalty or so from the larger number of pipelines, which is also what will allow the P4 to scale to higher Mhz. While it will debut at 1.4 in october or november, AMD will have comparable chip speeds about the same time and in volume. 3. AMD has a number of beneficial technology partnerships. These have already resulted in AMD's use of copper interconnects a year ahead of Intel and a faster bus speed can scale to 400 Mhz at least. Also through the motorola partnership will be access to IBM's SOI (Silicon on Insulator) technology which helps chip cooling. 4. As FASL (Fujitsu AMD Semiconductor Limited) is the leader in flash memory, it maintained that position when AMD was the first vendor to qualify for Nokias next generation of phones. Much more to write, but little time Paul Sundling

    SubjectOne more reason
    Entry09/02/2000 02:34 AM
    Memberpaul111
    I just got the most recent issue of computer gamer world. Each month they have 2 sets of computers the power rig and lean machine. One of the sets is self-built and then a set for premade machines. Until a couple months ago, ALL 4 were always intel machines. A couple of months ago athlons started appearing as the self-built lean machines. then there would be an athlon self-built lean machine and the prebuilt power rig. This month it is Athlons for both of the prebuilt systems and a duron for the self-built lean machine. This is a real barometer and one I follow closely. Paul Sundling

    SubjectIntel's first mistake
    Entry09/03/2000 05:14 AM
    Memberpaul111
    Intel has made a tremendous number of mistakes over the last year. The biggest mistake they ever made was when they cut off AMD from Intel's next designs and forced AMD to innovate or die. Most probably they did this because they didn't think AMD could pull it off. This is a huge miscalculation. Intel has buried many companies and forced even more companies to leave the processor business entirely. The latest victims were Cyrix, IDT and Centaur which are all now owned by VIA. Did intel think that after a long history of never giving up no matter how many times AMD neared bankruptcy, Intel could finally kill their competitor? AMD always come back and was saved from destruction at the last moment, only to have those hopes dashed once again by the next series of setbacks. What would make this time different? In the past AMD was always behind Intel since they were second sourcing their designs. Since they would have to have the next Intel design first they could never compete on the high end. So Intel could always institute a price war in the low end where AMD lived and maintain profits with the high end. Unwittingly Intel broke this cycle. Now AMD had to come up with something. They licensed technology from Digital (owned by Compaq) and used the EV6 bus which can scale to at least 400 mhz. They started a technology partnership with Motorola which lead to their implementation of copper interconnects long before Intel. As you may have guessed, the results of this mistake is the Athlon. For it is the Athlon which will change everything. Deploying the athlon core in an ever broadening range of products, AMD competes across the entire line. Instead of having to wait for the P4 design or Itanium design, AMD is already able to forge ahead with their own designs. The AMD boom bust cycle is over, behold a real competitor to Intel for the first time since the 386 days. How is Intel coping with having a competitor? You have no farther to look than the recall of the 1.133 ghz P3 to answer that question. Before too long, it will be hammer time.

    Subjectrumors of AMD using TSM - aggr
    Entry09/03/2000 05:33 AM
    Memberpaul111
    http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=14316308 It appears that AMD might soon close talks with TSM to be a foundry to produce chips. If this is true it signals a higher level of aggressiveness at AMD, as it would signal a new goal of higher than 30% of the market share. TSM is a gigantic foundry in taiwan which could produce chips for AMD in addition to their own fabs. The downside to this is the higher costs to produce chips through a foundry. At the same time, it limits liability since Fab utilization and depreciation becomes less of an issue. Once TSM was able to produce AMD chips the ramp could be very quick.

    SubjectAnother AMD Phantom launch
    Entry09/03/2000 05:40 AM
    Memberpaul111
    Unlike Intel which has been announcing chips before they are ready to ship. AMD has once again done the opposite, doing a phantom launch. They have already started selling the Duron 750 through the home shopping network before they have even been officially announced. http://www.hsn.com/Content/sf/dept/cat/prod/default.asp?pfid=37527&sku=37527&o=homefeature It's saturday and they have been selling them on TV and even state that HSN is introducing them before their worldwide launch. They did this with the thunderbirds initial release as well.

    SubjectInitial P4 - Athlon benchmarks
    Entry09/03/2000 07:32 AM
    Memberpaul111
    http://www.theregister.co.uk/content/1/12979.html This URL has a comparison of the 1.1 athlon currently shipping with a 1.4 P4 in preliminary benchmarks. There have been other benchmarks posted that had to be removed. The jist is that the 1.1 won 7 of the 12 benchmarks. The P4 should have done much better since it had a higher clockspeed. It's most likely a matter of the large pipeline and code still not optimized for the P4. While the final shipping benchmarks will presumably be much improved, it looks like AMD should have no problems shipping a competitve processor against the P4.

    SubjectCatalyst
    Entry09/06/2000 01:11 PM
    Memberalex15
    I agree with the points you bring up. What puzzles me is the widespread dislike amongst technical sources (tom's hardware, hardware review, etc...) for the Itanium/P4. Seems a little biased, while the underlying info seems pretty damning for INTC. AMD is trading in tandem with INTC (i.e. coming down hand in hand) when the two seem to have very different 18 months prospects. A couple of thoughts: - It does not seem that Wall Street is buying the weakness on INTC and continues to hope in INTC. AMD still undercovered. - INTC is making a big deal PR-wise about diversifying away from PC semis to telecom, mobile, memory etc. Seems like they are getting their eye of the ball. - What is a catalyst for AMD? When does Wall Street believe that the Athlon and Sledghammer is a real contender - Are there concerns about total AMD capacity. Even under the best market share increase scenarios, AMD is still constrained by its overall fab plant capacity vs. INTC - What about VIA, will it supply AMD adequately, will the INTC suit delay it enough - Isn't RMBS a short candidate? It seems to be trading on vaporware. Real inadequate business fundamentals vis-a-vis valuation - Is DELL considering using the Athlon. It seems it will have to if INTC can't deliver a 1.2Ghz PIII soon. - When does the word about all this spread broader than the super-techy hardware review sites? All the pieces are moving in the right direction, but when does the dam break is my puzzlement right now -AJF

    Subjectre more great analysis from al
    Entry09/20/2000 03:30 AM
    Memberpaul111
    What the sites have against the P4 is that on a per clock performance should be lower than existing chips because of the long pipeline (20 stages versus 10 for pentium and 12 for athlon). It's also much more expensive to make. What they have against itanium is that it is an unproven technology which is already years overdue. It's an attempt to compete with the high end like sun and insert incompatibilities to kill AMD (and any bit players). It will run slower on existing software than current chips. All of this is really signalled by the announcement that the P3 will continue on .13 micron. Everyone has INTC stock. You think they really want to see it go down? They have to position it so there is enough for 2 companies and that INTC is intentionally diversifying already. The street does not understand technology, only hype. They will not believe it coming from AMD until after a number of quarters of sustained growth. They will play after the fact as if they had known all along athlon and hammer would be a success. AMD plans to ship 50 mill processors next year which is out of about 160 million projected. At the end of next year the new fab should be fully ramped. at the same time is the switch to .13 micron process and their next generation processor should only be about 10% larger, other than possible cache increases. They are also planning on having a fab that will open in 2004. There are also talks about outsourcing to TSMC. Via is no longer going to be the only chipset provider for AMD, SiS, ALI and Nvidia will also be making chipsets. Yes RMBS is a short candidate, but that is obviously a risky investment and not a value play. :) Dell is considering AMD chips, but they will have to be in a compelling situation for it to happen. Holiday is a possibility. Also when there is a huge performance gap, they may have to act. The word could spread at any time. It's like the kid who cried wolf too many times. Now the wolf is hear and eventually they will catch on the wolf is really here this time. I expect most likely december/january timeframe.

    SubjectPLease note this stock has spl
    Entry09/20/2000 03:31 AM
    Memberpaul111
    So you can divide the price I have above by 2. Note this was the first stock split in 17 years.

    SubjectAMD was 4th most up on NYSE
    Entry09/20/2000 03:33 AM
    Memberpaul111
    This is the first time I remember seeing AMD so high on most up for the NYSE. It was up 14.62% today. I find the upgrade a little fishy after the downgrade from the same analyst just a couple weeks ago. He even said he regretted cutting AMD with the downgrade. First time I've ever seen that!!

    Subjecta shining moment comes
    Entry10/05/2000 05:26 AM
    Memberpaul111
    If AMD does blowout earnings on the 11th, it will send a message to wall street that AMD is indeed taking revenue from Intel. With Dell warning today that is icing on the cake. This could actually provide the pressure on dell that is need to make them use AMD chips. If Dell investors start to see Dell as taking a hit for not having AMD processors it will start to make some more serious waves. Intel has such a huge hole in their line up. AMD has the range from 650-1.2 ghz (as of next week) and intel hits a wall at 1 ghz. Then with the P4 release it will skip to 1.4 and 1.5 leaving a gaping hole. At the same time 1.3-1.5 ghz chips from amd should start arriving. This is AMD's first real chance to hurt Intel PR wise on wall street.

    SubjectP4 delayed, timna canceled, it
    Entry10/05/2000 05:29 AM
    Memberpaul111
    Officially the P4 has been delayed another month to november 20. The low budget wonder timna has also been canceled, as with the low cost integrated motherboards, it is already obsolete before it is even on the market. According to theregister.co.uk the itanium has been canceled and instead intel will start with the second generation 'mckinley'. This may actually be a good move for Intel. All of these Intel problems increase the chances for AMD to have a spectacular christmas quarter.

    SubjectWhat a rollercoaster
    Entry02/19/2001 05:11 AM
    Memberpaul111
    Since I first invested in AMD at about 9, it went to 48 and then back down to 14 and then back up to 26. I played the options and margins unfortunately, so I went from being up 300K to being down 70K to being down 50+ K. I wish I had cashed out my options or bought some puts, but from a technology standpoint I was right. Athlon continues to gain traction. The next year will continue to see AMD market share gains and entry into new markets. It will be harder than before because of the economic downturn, but the company is well positioned and is still performing well beyond historical numbers!!

    SubjectRating
    Entry10/03/2002 07:09 AM
    Memberjohn771
    Members who complain about the VIC ratings on their ideas will get a kick out of this one.


    Subjectrating
    Entry10/03/2002 10:51 AM
    Memberpat110
    Nice post. This is a joke! I hope it did not win the award of the week back then.

    SubjectAccounting and subs
    Entry03/01/2003 01:20 AM
    Memberdoobadoo802
    Too many JVs and partnerships. My accounting review of these guys indicates they could have liabilities with one of their Fujisu partnerships. I think FASL. They made a disclose in an onld 10-k or Q about a disagreement as to how much AMD has to kick into FASL, they have not reflected any reserve on the balance sheet. but is in the filings.

    Also, they are in a pickle with their Saxony partership in germany. They have covenants that may be tripped and that can cause cross defaults in the mothership. Its all very complicated and I admit that i've looked at quite some time ago. I believe the state of Saxony set up a favorable financing deal to bring jobs into the area. The the guy who was scheduled to take over for Jerry Sanders wanted to back out of germany, and then misteriously announced he would not take on the role of CEO when sanders retired. Enter Hector Ruiz from left field. I think AMD might not be able to get out of Germany, and that Saxony's interest is jobs. You need to look very closely at these JVs and off balance sheet subs, far more than I b/c once i saw them i just decided to steer clear and stop wasting time on this.

    In additon FASL sells the flash memroy to AMD. AMD has consistenly pumped equity into FASL. AMD can control the input costs when they buy flash from FASL. Possible to boost GM, and then compensate for the loss on fasl side by staging in equity. I listed to some old conference calls under the Sanders regime and he claimed they manage FASL to break even to avoid high Japanese tax. So its clear they purchase flash below market ratess via FASL. Its just to easy for AMD to capitalize FASL losses by making an periodic staged in equity contributions to FASL as cash that gets capitalized as equity on the AMD B/S. We all know that private equity valuation is the last true camel bazarr of corporate accounting. There has been a ramp up of cap-ex into Fasl recently....

    I can go one... if you want i will post about how AMD is assignign zero product costs to Working Opterons its building up inventory as we speak. Remember the reallocation of COGS to R&D. Hard to believe they are capitalizing Opteron construct costs into inventory for future expensing when the op is finally launch. Don't accounting rule say that if its not a feasible product you can expense it as R&D? But the opterons work and will be sold after launch, after AMD is done with the big bath.

    Too many accounting changes, huge restructuring charges, cash flowing into offshore JV that is capitalized then later big bathed into 'charges', what is there to like? Its got all the ingredients of the next enron... Oh, and FASL operations are not consolidated. Big surprise.....and the income statements of fasla are from 2000, unless tehy filed new ones....

    My advice stay clear. Don't short, they will probably pull a trick to blow away the numbers in a few quarters. Just leave it where it is...

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    Doob
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