I have been pretty slammed at work this week, we launched a few new machines and we’re preparing to launch some more new systems this month. Our website has been modified as well – and we have a number of upgrades that we added to our OMEN series this week.
In any case, I didn’t get a chance to write about Think Equity Partners sudden change of heart on AMD. If anyone in the know takes the time to read this report and they will see they are downgrading the stock for all the wrong reasons. I feel sorry for the people that actually pay for this type of research. Think Equity actually downgraded AMD from a BUY to $50 to SELL down to $30.
The Analyses: “We heard from the supply chain that Intel is beginning to slash pricing to regain market share or at least stave share losses. We believe this began several days ago; we first heard about it at CeBit on Friday. We are lowering our estimates and our price target, and reducing our rating to SELL from BUY.”
The Truth: The truth is the distribution channel was given “name your price” instructions by Intel on a list of low end parts that no one is really buying. Intel is clearing inventory, making huge write downs in order to prepare for the future – and to dump dead stock. There is no pressure on AMD to drop prices on any of their higher margin items to compete. The suggestion that AMD is losing margin because of this “threat” is bloody ludicrous. Even more ludicrous, the suggestion that Intel can regain market share by slashing prices on parts that no one cares about...
Mark my words, Intel will *only* regain share when they start inventing and producing better products. There is no doubt that they have woken up from their long slumber, but it will take many months before we see any cool new products from the boys in blue.
The bottom line is I humbly believe Think Equity wrongly downgraded AMD. When AMD reveals their next quarter results, I suspect the poor chaps who believe in such research will be wondering what the heck just happened. Unfortunately reports like this are better utilized to hold fish & chips than base crucial investment decisions on.
Let me make a recommendation to those of you looking to understand the dynamics of the tech industry: Watch the hardware sites, read the performance benchmarks, and check out the enthusiast system builders like VoodooPC to see what we believe is the best, cutting edge hardware.
Ultimately gamers guide the industry, it’s surprising but true. Speaking of which, it looks like Dell may be acquiring Alienware. Use your imagination what that might mean for AMD.
It is certainly going to be an interesting year.
10 blogger comments:
It begs the question as to whether these market experts have vested interests in keeping the spin on Intel going at the expense of solid AMD performance.
Looks like the "researchers" STILL haven't learnt from the last fiasco.
INTEL CTO showed off Opteron board during his IDF presentation-link.
"instructions by Intel on a list of low end parts that no one is really buying. Intel is clearing inventory, making huge write downs in order to prepare for the future – and to dump dead stock."
Hello, may I know what are these dead stock they are dumping? And if there is a list of them available somewhere where I can refer? Thank you.
AMD is way overpriced. Remember how Google stock dropped like a rock? That was only triggered by the current events. A P/E of 86 is crazy, especially for a company who is lagging in the future technologies of notebooks and soon servers. Desktop chips don't mean a thing anymore. I don't know if you're trying to effect the market...actually you are. But the point is that Intel delivers chips on time and has a realistic P/E.
Anonymous said...
It begs the question as to whether these market experts have vested interests in keeping the spin on Intel going at the expense of solid AMD performance.
It's hard to say -- but there are indications that Intel is getting back on track, but this isn't affecting AMD anytime soon.
Tue Mar 14, 09:33:25 PM
Rookierookie said...
Looks like the "researchers" STILL haven't learnt from the last fiasco.
agreed.
Wed Mar 15, 01:20:21 PM
Chuang Shyue Chou said...
Hello, may I know what are these dead stock they are dumping? And if there is a list of them available somewhere where I can refer? Thank you.
You would need to contact the distributers that have them. They aren't affecting AMDs margnis or market share.
Wed Mar 15, 07:46:54 PM
Harakim said...
AMD is way overpriced. Remember how Google stock dropped like a rock? That was only triggered by the current events. A P/E of 86 is crazy, especially for a company who is lagging in the future technologies of notebooks and soon servers. Desktop chips don't mean a thing anymore. I don't know if you're trying to effect the market...actually you are. But the point is that Intel delivers chips on time and has a realistic P/E.
AMD is lagging on notebooks? Based on what is happening in Taiwan AMDs market share in notebooks is/will grow regardless of how good Core Duo is.
AMD is lagging on servers? Google is buying tons, in fact they just ordered a ton of the new 2P Opteron servers. AMD will have the 4P and up market wrapped up for years to come still.
Intel delivers on time? That's news.
Desktop chips don't matter? Amazing :)
Hey, what about these reports that AMD will slash prices on their processors this month? Is there any truth to this? Because I have actually been planning my upgrade based on this report:
http://www.dailytech.com/article.aspx?newsid=2800
I know I look like an idiot since I just replied to a story this old. Luckily for me I did it anonymously. ;)
But it's actually Google's fault. For some reason their personalized home page is listing this story at the top of your RSS feed.
Not sure if anyone will still read this--but hindsight definitely clears things up, no?
Their downgrade of AMD looks pretty smart now, doesn't it, regardless of the reasons originally cited.
This exemplifies a trap that most of us techies fall into: we get emotionally attached to the technology/ gizmo, etc, and we think that gives us an edge in picking stocks. WRONG! Technological edge does not always translate into a strong stock.
Not sure if anyone will still read this--but hindsight definitely clears things up, no?
Um way no. They downgraded it before it hit $28 then it shot to $42. Seems like those who listened to these guys ended up buying Intel and riding it down to $17 and they're still waiting on it to go up (it will eventually I'm sure).
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