Please, don't talk about how well AMD is doing! You'll only make the stock price slide another 10%, as night follows day... [irrational market grumbling intensifies]
replies(1):
That's not how it works. You need to pump money into fabs to get them working, and Intel doesn't have money. If AMD had fabs to light up their money, they would also have a much lower valuation.
The market is completely irrational on AMD. Their 52-week high is ~225$ and 52-week low is ~90$. 225$ was hit when AMD was guiding ~3.5B in datacenter GPU revenue. Now, they're guiding to end the year at 5B+ datacenter GPU revenue, but the stock is ~140$?
I think it's because of how early Nvidia announced Blackwell (it isn't any meaningful volume yet), and the market thinks AMD needs to compete with GB200 while they're actually competing with H200 this quarter. And for whatever reason the market thinks that AMD will get zero AI growth next year? I don't know how to explain the stock price.
Anyway, they hit record quarterly revenue this Q3 and are guiding to beat this record by ~1B next quarter. Price might move a lot based on how AMD guides for Q1 2025.
Being fabless does have an impact because it caps AMD's margins and makes x86 their only moat. They can only extract value if they remain competitive on price. Sure that does not impact Nvidia, but they get to have fat margins because they have virtually no competition.
> The market is completely irrational on AMD. Their 52-week high is ~225$ and 52-week low is ~90$.
That's volatility not irrationality. As I wrote AMD's valuation is built on the basis that they will keep executing in the DC space, Intel will keep shitting the bed and their MI series will eventually be competitive with Nvidia. These facts make investor skittish and any news about AMD causes the stock to move.
> the market thinks AMD needs to compete with GB200 while they're actually competing with H200 this quarter. And for whatever reason the market thinks that AMD will get zero AI growth next year?
The only hyperscaler that picked up MI300X is Azure and they GA'ed it 2 weeks ago, both GCP and Azure are holding off. The uncertainty on when (if) it will catch on is a factor but the growing competition from those same hyperscaler building their own chip means that the opportunity window could be closing.
It's ok to be bullish on AMD the same way that I am bearish on it, but I would maintain that the swings have nothing to do with irrationality.