I wouldn't say AMD's GPU production backfired, it's just that things are back to normal levels and we don't see hundreds of millions in surprise sales on top of the regular sales.
The best part is that, even if the crypto-bubble sales were huge and unsustainable and volatile, AMD has covered 90% of that revenue with stable, reliable, constant, continuous CPU, APU and server CPU sales with higher margins.
They did it by the book!
If crypto bubbles up again, you can add another billion in the mix, just as a bonus.
If it doesn't, then the CPU/APU sales will continue to grow at a steady, stable pace.
Kudos to that..AMD has been doing exactly what they have set out to do via Dr Lisa Su leadership. here is hoping they maintain/exceed $26.5 USD into next year...was really hoping for them to crest $40 per share, but analyst/investor firms are even more biased then average client base.
apparently they do not see a company that was "dying" for a number of years skirting the grave to becoming once more a force to be reckoned with. Intel is able to basically maintain their standing of valuation and Nv has been more or less non stop vastly overvalued IMO solely based on GPU sales where AMD does the "entire" system and just cannot seem to "get a break" in regards to how much analyst/investor think they are worth)
I guess AMD would have to get 100% market share of CPU and GPU to be "worth" and hold $40+ where Nv and Intel can totally fk up and e worth triple valuations (which they have both done but seems like them "firms" have their full blinder set on constantly)
The only thing more biased then an investor group in an AMD fanboy.
AMD is turning a profit now, great. Nvidia turned a net profit of 1.1 BILLION in Q2 of 2018. And nvidia doesnt have a zen chip to sell. Intel, despite zen competition, earned 5 BILLION in the same quarter.
You wanna know why AMD's share price is so low? Thats why. Intel makes more in a week then AMD does in a year. That is why intel and nvidia are worth so much more, they make a lot more.
When AMD is making 500-600 million a quarter in net profit, then their share price will skyrocket upward.
The real problem was that with HBM2 prices being sky high, it drove up the cost of Vega based video cards by $100 or more(I am not counting the war profiteering we saw from those selling cards to the public). So, a $500 card was selling for $600-$650 due to the HBM2 memory price. That drove down interest by the general public, because Vega 64@$500 was a decent value, and still is. Now there is the "wait and see" that many took to the Geforce RTX cards, so there were going to be fewer sales of ALL cards until the true reviews came out.
Due to the price of the RTX 2070, 2080, and 2080Ti being higher than many expected, $500 for a Vega 64 is still a decent price for the performance, especially when it comes with a game bundle. There are always certain seasonal things that happen as well that are often not mentioned. When do partners stock up on parts is the real question. Right now, this is the pre-holiday season, and inventories of parts to sell are being put together for the holiday season. In order to meet the demand, GPU manufacturers would need to have enough supply of parts, so how big was their existing stockpile of components? Vega not selling well due to the HBM2 prices driving up board prices would result in there being a lot of GPUs still in inventory to put on boards. This means that orders at this time of the year will actually be down due to the time it takes from product production to packaging to distribution channel to the final destination. This is the whole, "seasonal" nature of certain things.
As mentioned, the consoles have been around for a long time, and how many were selling and how many are in inventory will also be an issue, because if the consoles have been made and in warehouses, the console makers don't need additional chips for them. The build-up for production would have been back in June. Again, seasonal stuff, but also product life cycle stuff since there are no new consoles gearing up for launch.
Year to year, AMD is doing ok, this is just a strange time of the year, and AMD doesn't have a BIG product launch for new video cards to drive up demand for new product.
Come next year, Navi will probably be a big driver of sales, and the GPU side will see a big surge.
I think the thing is to look at AMD debt is - I no financial person - but it is in the billions. Today it's stock price is when it started gaining in August.
Last quarter, Intel's debt to equity ratio was 0.41...Amd debt to equity ratio was 1.58 which basically means AMD is 4 times more riskier as regards their debt.
Intel is ridiculously more financially stronger than AMD that they really do not have to lower their chip prices at all regardless of what AMD does!!!
Basically AMD even with their superior Zen architecture, is really no competitive financial threat to Intel until they start selling their Epyc chips into the billions (yes...at least 2 billion)
I wouldn't state it as strongly as that(Intel HAS been responding aggressively to Zen, offering much more bang for significantly less buck almost immediately after the Ryzen launch, though their current supply issues are pushing prices back towards pre-Zen levels), but I don't fundamentally disagree.
I didn't look up debt-to-equity because I had already read more about business finance than I cared to, but was pretty sure AMD's ratio was a lot worse(it would pretty much have to be). This was about pointing and laughing at HStewart, who was presenting Intel's situation as AMD's and declaring it a crippling weakness. It was not professional financial consultation.
First of as AMD being superior architecture, that is an opinion and not a fact.
Intel is financially stronger because company does not put all it eggs in one basket like AMD with Zen and Vega. AMD long term debt is bigger than most believe - if I read fight the financials - they owe more than the company is worth. If Zen does not do significantly better - AMD is history.
Yes, I absolutely un-genuinely agree! What is more superior than Intel architecture; that one arch to rule them all! And yes again. AMD put their their eggs in one basket. Mind you, eggs. egg(s <- here, here)! On the opposite, the mighty Intel put their eggs in different basket. What could gone wrong with Intel? Nope! Nada! Neva!
You have a choice if you don't like Intel architecture, you can use ARM or SPARK
Most people think of Intel as just PC - x86 technology and forgot about all the other products they have including, solid state memory, programable logic memory, misc chipsset in many areas include 5G and many other including working with ARM for neural networks which ARM needs
AMD wouldn't have had a problem at all if they'd charge HIGHER prices, and quit killing margins by attaching crap that blows the cost or causes shortages. They have killed multiple HIGH end products with HBM/HBM2. STOP, for the love of GOD, STOP using HBM unless you can actually prove it SERIOUSLY improves perf. Otherwise go cheap and massively easy to pump out quantity just in case you need them. GDDR5x would have solved most of AMD's problem with the last 2 vid launches and raised margins while selling MORE units due to no shortages of hbm/hbm2.
CPU side, if you have a product that wins, charge like it WINS. Otherwise get used to 40% margins instead of ever understanding what 60+ looks like. I can't understand why they don't get selling HIGH is better than selling low. Why do you think in ANY shortage Intel moves production to HEDT/SERVER, screw bottom end users? Because 80% of the NET INCOME is TOP END stuff. IE, in vid cards that money is made above $250 (probably 300 now as we keep moving it up, myself spent $509 1070ti, first over $300 EVER, quite a jump for me). On Intel side, most is made from HEDT and up and the top consumer chips ($280+). The rest is pretty much just salvage so you don't lose all those hard earned TOP END dollars. AMD needs to stop pricing like they're trying to get us into bed...LOL. Quit trying to get us to like you. PRICE LIKE INTEL/NVDA if you're on top! OR, $18 stock price down from $34 in a month. You should be making 300-500mil a Q and more once Zen2 7nm stuff hits server/desktops. If you get that pricing wrong too, you deserve to make nothing and hopefully get bought so someone with real management skills can price their way to REAL competition financially! You know, with a billion a year NET or more!
If you haven't figured it out, I don't care about your opinion. You're an Intel shill and bring nothing to the discussions on here. You're only here to shit post. You and your rants are tiresome.
Does AMD generate an acceptable amount of cash through operations? AMD’s debt level has been constant at around US$1.40B over the previous year made up of current and long term debt. At this stable level of debt, AMD currently has US$1.19B remaining in cash and short-term investments , ready to deploy into the business. Additionally, AMD has produced US$68.00M in operating cash flow over the same time period, leading to an operating cash to total debt ratio of 4.87%, meaning that AMD’s debt is not appropriately covered by operating cash. This ratio can also be a sign of operational efficiency as an alternative to return on assets. In AMD’s case, it is able to generate 0.049x cash from its debt capital.
Does AMD’s liquid assets cover its short-term commitments? With current liabilities at US$1.49B, it seems that the business has been able to meet these obligations given the level of current assets of US$2.62B, with a current ratio of 1.76x. Usually, for Semiconductor companies, this is a suitable ratio since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
(source google search)
just like countries and "banking" in general, debt is actually a good thing because it means you are spending money on investments, portfolio, RnD and the like, as long as what you are bringing in keeps you in the "black" it does not matter how much "red" you have, in this case, AMD has been profitable for the past 6 quarter or so and has pretty much paid back the vast majority of long term debt levels and is now "maintaining" their expected debt load.
Dt Su is probably smart in deceiving some people that AMD can use it fan based to bad mouth the competition and at same time spend more money than they worth, AMD's purchase of ATI was the first stage of AMD going into debt - and investing in Zen architecture and focusing on the gaming nd mining world maybe seem smart in the short term - but in the long run it will destroy them.
Lets be very honest and don't blame Intel licensing - have you gone into a local BestBuy, how many desktop machines do you find compared to laptops. Dr Su is lost sense of Reality.
So when other users tell you to shut up it's because of this. You didn't even respond to the analysis Dargonstongue provided, instead you just called the AMD CEO a liar and deceiver, and accused them of slander.
We all get that you have a permanent brown nose from kissing Intel ass, but you can't blame others for being fed up with your garbage when it's basically your whole deal on this site.
I think you try to make doing something that I didn't do - I didn't say Dr Su is a liar - but instead I base on what Dragonstongue statement is that may not be so smart. You can actually go to AMD financial statements and see the processing of debts - or simple search AMD Debt on the internet.
But interesting at this current time 15:43 EST Intel stock is up 5.14% and AMD is down 16.54%
so it obvious is looking at AMD numbers and seeing red. Yes Intel stock got hurt by Spectre/Meltdown stuff - but if look at there stock in 5 year plan you will notice that It is same level as Nov 2017 - which looks like Intel has recovered from it. On the other side, look at AMD and you will see that very rapidly AMD lost the gain that AMD gain last summer.
"Dt [sic] Su is probably smart in deceiving some people that AMD can use it fan based to bad mouth the competition."
Not sure how else to read this than Dr. Su is manipulating facts (lying) to advantage her company, while spreading false statements about competition.
I think most readers here understand that 'the investors' are all thin skinned babies that will dump a stock following a 0.001% miss on earnings guidance, only to pick it back up on rebound.
More to the point, my ear on the ground in semicon manufacturing only ever hears about Intel engineers jumping ship for various foundry and design companies, never those from AMD. I trust the actual industry professionals 100x more than I do the C-suite and investors when it comes to company health.
Intel executives are doing a good job at making people badmouth their own company. Did Intel CPU performance go up significantly between 2013 and 2017, or was it largely stagnant? It took Ryzen in order to wake Intel up and start actually trying to do anything.
AMD purchased ATI just prior to the recession which caused the entire stock market to go down significantly. If the timing had been a year later in 2008 after the recession hit, the purchase price would have been a lot lower. These things happen in business, but AMD survived it. Lisa Su has done an amazing job of setting a direction for the company, get the CPU business back to being properly competitive again at the high end, and then use the resulting money to get the graphics division back on track(expectation of 2020 for when the next true all-new GPU architecture will come out from AMD).
You are only deceiving yourself if you think that AMD isn't on the verge of going from continually struggling to being seen as a true leader.
I am actually quite fine with the AMD side of the GPU market. You can finally pick up Vega cards at a half ways decent price and their multi purpose. The 580 is still excellent for gaming as well.. and again is coming in at reasonable prices. Looking thru local stock, there isn't a lot there but at least you can walk in to a store and buy one.
Amd should be looking at their next gen as Nvidia has it's top guns out already and many are not happy with the pricing.. but with many gamers already having some pretty good graphic setups right now there isn't a lot to be all that thrilled about (upgrade wise) so .. whatever it is what it is. If your on a old system nows the time to get that much needed upgrade.
Now the Q2 discrete GPU market share from Jon Peddie Research makes sense. How come NVIDIA knew 3 months ago that cryptocurrency demand had dried up and AMD only discovered it now? AMD gave themselves a stellar Q2 by pushing forward revenue from Q3 and Q4. Wonder what sort of insider trading has gone on at AMD over the past 3 months.
nVidia didn't see as big a boom from the buttcoin diggers as AMD in the first place, because AMD cards are actually better at buttdigging. During the peak of the buttdigger craze, I could still find green video cards at inflated prices, but every red card of even remotely decent specs was just empty shelf space.
NVIDIA had roughly 50% of the revenue from crypto. The reason NVIDIA cards had greater availability is because NVIDIA had more liquidity because they owned 80% of the gaming market. They could be more certain they'd sell through the cards if crypto evaporared so they didn't have to be so conservative with their production.
Regardless, it's not that important. The ethereum global hashrate shows when crypto demand dried up. And when it dried up it dried up for both NVIDIA and AMD.
Oh, and another thing that shows pretty clearly that AMD is trying to he sneaky here. Even if AMD actually still saw strong crypto demand in Q2, the fact that NVIDIA's demand completely dried up in Q2 should make it impossible for them to be surprised by crypto drying up for them in Q3.
Where are you getting 'AMD is trying to be sneaky'? Their Q3 results are as expected, only with better gross margin: 'For the third quarter of 2018, AMD expects revenue to be approximately $1.7 billion, plus or minus $50 million (/it is 1653M), ... GAAP gross margin to increase to approximately 38 percent (/increased to 40%), driven by the sales growth of Ryzen and EPYC products, partially offset by lower sales of GPU products in the blockchain market'. And- it they produced more Polaris chips than needed- then that will not go to waste, as they are not releasing a replacement for them for another ~9months at least. And, a lot of their SKUs are still very much overpriced in many markets of the world, meaning- there is not enough of them being delivered.
And yet, despite meeting or exceeding expectations, AMD's share price has tanked by a quarter within less than 24 hours, with what Business Insider describes as "AMD is getting smoked after revenue misses, guidance falls short". They must've been reading something different to the rest of us.
Exact same thing happened after Q2 earnings report, for missing guidance by a few $M due to crypto demand drying up. They acknowledged that loss of market back in July, so I don't know what Yojimbo is going on about them deceiving investors with predictions of crypto profits in Q3
"Exact same thing happened after Q2 earnings report, for missing guidance by a few $M due to crypto demand drying up. They acknowledged that loss of market back in July, so I don't know what Yojimbo is going on about them deceiving investors with predictions of crypto profits in Q3"
If they acknowledged it in Q2 then it's even worse, isn't it? Because then they should have told investors that their channel was full and the weak GPU demand should not have been a surprise.
From the Q3 conference call, Lisa Su said: "Third quarter revenue was $1.65 billion, an increase of 4% from a year ago. Looking at our Computing and Graphics segment, third quarter CG segment revenue increased 12% year-on-year, driven by significant growth in both client processor and OEM GPU sales that offset a larger-than-expected decline in channel GPU sales."
So why were the GPU sales declined larger than expected if they knew about it in Q2?
Later she reiterates: "Channel GPU sales came in lower than expected, based on excess channel inventory levels, caused by the decline in blockchain-related demand that was so strong earlier in the year."
Later, when answering a question: "We are expecting that it might take a couple quarters to completely get back to, let's call it, a normal channel. However, it is factored into our Q4 guidance."
If they knew "blockchain" was drying up then why did they fill the channel? They thought their 2 year old cards that only managed to capture 20% of the gaming market before crypto would suddenly be in high demand with gamers? And if the channel was filled because of an expectation for more sales in Q2 and they knew those Q2 sales never came then they already knew it would become filled when they made their Q2 conference call. Why didn't they tell people their channel would be filled then?
I will give you the benefit of the doubt re: guidance on blockchain. I swear I read in their Q2 report that they had pegged crypto-related GPU sales as a "negligible component" of revenue going forward, but I can't seem to find it now.
As for speculation on increased GPU production leading to an excess of inventory, I think there were multiple factors involved in that decision based on the market demands early in the quarter. I concede that they may have been bullish on blockchain demand for GPUs, but I suspect the story is more complicated, especially given that supply lead times for a GPU are ~3-4 months from wafer fab in to packaging/shipment. Unless they had actually adjustment production well ahead of the Q2 report then we would only expect the bump in volume to hit shelves around September, a time frame that sets them up for failure because of NVIDIA announcements of Turing.
I can explain why things didn't happen as expected, the timing of the NVIDIA RTX series of chips. Many people decided to put any GPU purchase on hold until after the launch of the new NVIDIA chips. If you hear that Ford has a really new and revolutionary truck engine that will show up in the 2020 model year trucks, anyone who pays attention to trucks and knows that Ford has some knowledge of the industry will go into a "wait and see" mode, unless they need to purchase immediately or can't wait for whatever reason. As a result, not only will Ford sales drop on the rumors of new engines, but competing truck makers will wait, just to see if the rumors/hype are true. It may not even change their choice, but they WILL wait, just because that is what so many others will be doing.
That is also why it will take 1-2 quarters, because people have still been waiting to hear about if ray tracing will even be implemented by game developers, or if DLSS will actually make enough of a difference to justify the higher prices of the new NVIDIA cards. Will there be a 7nm Vega that might be competitive in gaming? All of these things are working against AMD on the GPU side.
I can definitely say that as long as AMD releases Ryzen 3rd gen in Q1, sales will be high enough to overcome any soft GPU sales figures.
No, Their Q3 results were not as expected. They missed on revenue. "Third quarter revenue was $1.65 billion, an increase of 4% from a year ago. " As you pointed out, guidance was $1.7 billion.
And their Q4 guidance is significantly lower than expected. They guided $150 million less than analysts expected.
"And- it they produced more Polaris chips than needed- then that will not go to waste, as they are not releasing a replacement for them for another ~9months at least."
That's not the point. The point is shady practices by management that obscure a view of that company's business from its shareholders. Using the channel to hit numbers is against SEC regulations. It's what the CEO of Krispy Kreme was forced to resign over in about 2004. Stock price manipulation by management is a serious issue, it doesn't matter if that inventory will eventually be sold (and in the most extreme cases it may not be, because the company may be allowed to go bankrupt after the management has cashed in).
Guidance was 1.650 to 1.750B, and with crypto sales ending, AMD made 1.653B, so within the guideline. Now, of course, this is on the low end- but had the crypto stayed relevant- AMD would have had extra revenue right on top of this 1.65B point. They made inventory for it. Sales to miners did not happen in Q3. But if you say that end of crypto was not a surprise to AMD (as if they could have known in Q2 what is going to happen)- it should not have been a surprise to investors either (I'm talking about the stock price drop only today, while crypto was dormant all Q3).
"Guidance was 1.650 to 1.750B, and with crypto sales ending, AMD made 1.653B, so within the guideline."
It doesn't work that way. Not when a company's stock price is up over 150% YTD, it's selling at rich price to earnings and price to revenue ratios and that guidance itself already represents only a 4% year over year revenue increase. And everyone concerned knows it doesn't work that way.
"it should not have been a surprise to investors either"
So the investors shouldn't have believed AMD at their Q2 conference call. On that I completely agree with you. The stock never should have been bid up to 34 dollars a share. Personally I think 12 makes sense. But it's really hard to know. It's hard to get a good picture of Ryzen because they hide it with their GPU revenue and crypto helped them do that.
Yojimbo, who do you write for? I want to follow your financial guidance because you are the only person I have ever read claiming what you claim. The rest of the "experts" are either idiots or lying.
A lot of what makes a stock price go up comes from expectations for the future of the company, as well as for the stock price itself. Looking at the position AMD is in on the CPU side, you have AMD gaining ground in CPU market share as well as mind share, where more consumers are gaining awareness of AMD and AMD products. On the server side, getting market share becomes easier as hardware makers become more familiar with the products.
Looking at projections of Intel, where capacity issues are causing shortages, not having 10/12nm based processors until Q4 2019 at the earliest, and a general feeling that Intel is losing its competitive edge, AMD looks better as well.
So, if AMD gets 7nm Ryzen processors going out to consumers by April of 2019, AMD will be gaining a lot of market share and income, at the expense of Intel.
On the GPU side, AMD isn't talking a lot, because Navi isn't expected to come out until the second half of 2019. This means that AMD is going to try to get that inventory level down before they announce their next generation part. They will NOT announce that Navi may be ready in June, because that will trigger consumers to wait on purchases and make it tougher to sell through that inventory. Remember NVIDIA having problems selling through all those 1000 series chips? The same applies here, but NVIDIA was stupid in releasing the RTX cards before they got rid of enough of that inventory.
Too many people get fixated on one product category, and they lose sight of the big picture. Analysts are only interested in short-term stuff, they couldn't have comprehended how well Ryzen would do for AMD as a whole in Q2 2017, because they don't care about the quality of products, they don't understand what even one amazing product release can do for the long-term prospects for a company. The very concept of gaining traction when it comes to selling server processors is beyond their comprehension, even though it is like the process of trying to clear out the short sale people who keep pushing down stock prices, and once you hit a certain "critical mass", suddenly things will improve.
The very momentum that you talk about when it comes to stock price, and what SHOULD hold a stock price back is exactly in that same area, getting people either impressed by a company and driving up stock price, or people not seeing the potential growth within the company, because they have a vested interest in the competition.
AMD stock DOES deserve to be up at the 34 dollars per share level, but it will take another two quarters, time for Ryzen 3rd generation to be released in order for news of AMD really having a product that will beat Intel in all areas for them to realize it.
Remember, these same analysts are the ones who keep driving up Amazon, Apple, and other highly hyped stocks. Those stocks don't deserve those high prices or market caps either, but they get them because of the hype. Another recession will knock these companies down a LOT, while AMD and Intel won't lose too much by comparison.
How many GPUs did NVIDIA end up having stuck in inventory before they just accepted it and just released the RTX cards anyway? RTX card launch stalled sales of video cards for both AMD and NVIDIA, but NVIDIA has new cards to generate income, AMD won't have a big GPU launch until July of next year at the earliest.
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0iron - Wednesday, October 24, 2018 - link
So, AMD ramping up GPU production backfired?IGTrading - Thursday, October 25, 2018 - link
I wouldn't say AMD's GPU production backfired, it's just that things are back to normal levels and we don't see hundreds of millions in surprise sales on top of the regular sales.The best part is that, even if the crypto-bubble sales were huge and unsustainable and volatile, AMD has covered 90% of that revenue with stable, reliable, constant, continuous CPU, APU and server CPU sales with higher margins.
They did it by the book!
If crypto bubbles up again, you can add another billion in the mix, just as a bonus.
If it doesn't, then the CPU/APU sales will continue to grow at a steady, stable pace.
Dragonstongue - Thursday, October 25, 2018 - link
Kudos to that..AMD has been doing exactly what they have set out to do via Dr Lisa Su leadership. here is hoping they maintain/exceed $26.5 USD into next year...was really hoping for them to crest $40 per share, but analyst/investor firms are even more biased then average client base.apparently they do not see a company that was "dying" for a number of years skirting the grave to becoming once more a force to be reckoned with. Intel is able to basically maintain their standing of valuation and Nv has been more or less non stop vastly overvalued IMO solely based on GPU sales where AMD does the "entire" system and just cannot seem to "get a break" in regards to how much analyst/investor think they are worth)
I guess AMD would have to get 100% market share of CPU and GPU to be "worth" and hold $40+ where Nv and Intel can totally fk up and e worth triple valuations (which they have both done but seems like them "firms" have their full blinder set on constantly)
TheinsanegamerN - Thursday, October 25, 2018 - link
The only thing more biased then an investor group in an AMD fanboy.AMD is turning a profit now, great. Nvidia turned a net profit of 1.1 BILLION in Q2 of 2018. And nvidia doesnt have a zen chip to sell. Intel, despite zen competition, earned 5 BILLION in the same quarter.
You wanna know why AMD's share price is so low? Thats why. Intel makes more in a week then AMD does in a year. That is why intel and nvidia are worth so much more, they make a lot more.
When AMD is making 500-600 million a quarter in net profit, then their share price will skyrocket upward.
cwolf78 - Monday, October 29, 2018 - link
What a dick...Targon - Thursday, October 25, 2018 - link
The real problem was that with HBM2 prices being sky high, it drove up the cost of Vega based video cards by $100 or more(I am not counting the war profiteering we saw from those selling cards to the public). So, a $500 card was selling for $600-$650 due to the HBM2 memory price. That drove down interest by the general public, because Vega 64@$500 was a decent value, and still is. Now there is the "wait and see" that many took to the Geforce RTX cards, so there were going to be fewer sales of ALL cards until the true reviews came out.Due to the price of the RTX 2070, 2080, and 2080Ti being higher than many expected, $500 for a Vega 64 is still a decent price for the performance, especially when it comes with a game bundle. There are always certain seasonal things that happen as well that are often not mentioned. When do partners stock up on parts is the real question. Right now, this is the pre-holiday season, and inventories of parts to sell are being put together for the holiday season. In order to meet the demand, GPU manufacturers would need to have enough supply of parts, so how big was their existing stockpile of components? Vega not selling well due to the HBM2 prices driving up board prices would result in there being a lot of GPUs still in inventory to put on boards. This means that orders at this time of the year will actually be down due to the time it takes from product production to packaging to distribution channel to the final destination. This is the whole, "seasonal" nature of certain things.
As mentioned, the consoles have been around for a long time, and how many were selling and how many are in inventory will also be an issue, because if the consoles have been made and in warehouses, the console makers don't need additional chips for them. The build-up for production would have been back in June. Again, seasonal stuff, but also product life cycle stuff since there are no new consoles gearing up for launch.
Year to year, AMD is doing ok, this is just a strange time of the year, and AMD doesn't have a BIG product launch for new video cards to drive up demand for new product.
Come next year, Navi will probably be a big driver of sales, and the GPU side will see a big surge.
HStewart - Wednesday, October 24, 2018 - link
I think the thing is to look at AMD debt is - I no financial person - but it is in the billions.Today it's stock price is when it started gaining in August.
Lord of the Bored - Wednesday, October 24, 2018 - link
Just looked it up. Intel has over 23 billion in debt at present. That appears to be ten times more than AMD.Granted, Intel has a lot more income, too. Which is why analysts look at the debt-to-equity ratio, not the actual debt.
lemans24 - Wednesday, October 24, 2018 - link
Last quarter, Intel's debt to equity ratio was 0.41...Amd debt to equity ratio was 1.58 which basically means AMD is 4 times more riskier as regards their debt.Intel is ridiculously more financially stronger than AMD that they really do not have to lower their chip prices at all regardless of what AMD does!!!
Basically AMD even with their superior Zen architecture, is really no competitive financial threat to Intel until they start selling their Epyc chips into the billions (yes...at least 2 billion)
Lord of the Bored - Thursday, October 25, 2018 - link
I wouldn't state it as strongly as that(Intel HAS been responding aggressively to Zen, offering much more bang for significantly less buck almost immediately after the Ryzen launch, though their current supply issues are pushing prices back towards pre-Zen levels), but I don't fundamentally disagree.I didn't look up debt-to-equity because I had already read more about business finance than I cared to, but was pretty sure AMD's ratio was a lot worse(it would pretty much have to be). This was about pointing and laughing at HStewart, who was presenting Intel's situation as AMD's and declaring it a crippling weakness. It was not professional financial consultation.
HStewart - Thursday, October 25, 2018 - link
First of as AMD being superior architecture, that is an opinion and not a fact.Intel is financially stronger because company does not put all it eggs in one basket like AMD with Zen and Vega. AMD long term debt is bigger than most believe - if I read fight the financials - they owe more than the company is worth. If Zen does not do significantly better - AMD is history.
t.s - Thursday, October 25, 2018 - link
Yes, I absolutely un-genuinely agree! What is more superior than Intel architecture; that one arch to rule them all! And yes again. AMD put their their eggs in one basket. Mind you, eggs. egg(s <- here, here)! On the opposite, the mighty Intel put their eggs in different basket. What could gone wrong with Intel? Nope! Nada! Neva!HStewart - Thursday, October 25, 2018 - link
You have a choice if you don't like Intel architecture, you can use ARM or SPARKMost people think of Intel as just PC - x86 technology and forgot about all the other products they have including, solid state memory, programable logic memory, misc chipsset in many areas include 5G and many other including working with ARM for neural networks which ARM needs
PeachNCream - Thursday, October 25, 2018 - link
Intel architecture...you mean x86-64? AKA AMD64?Lord of the Bored - Friday, October 26, 2018 - link
Eggs and baskets, that is an opinion and not a fact.TheJian - Friday, October 26, 2018 - link
AMD wouldn't have had a problem at all if they'd charge HIGHER prices, and quit killing margins by attaching crap that blows the cost or causes shortages. They have killed multiple HIGH end products with HBM/HBM2. STOP, for the love of GOD, STOP using HBM unless you can actually prove it SERIOUSLY improves perf. Otherwise go cheap and massively easy to pump out quantity just in case you need them. GDDR5x would have solved most of AMD's problem with the last 2 vid launches and raised margins while selling MORE units due to no shortages of hbm/hbm2.CPU side, if you have a product that wins, charge like it WINS. Otherwise get used to 40% margins instead of ever understanding what 60+ looks like. I can't understand why they don't get selling HIGH is better than selling low. Why do you think in ANY shortage Intel moves production to HEDT/SERVER, screw bottom end users? Because 80% of the NET INCOME is TOP END stuff. IE, in vid cards that money is made above $250 (probably 300 now as we keep moving it up, myself spent $509 1070ti, first over $300 EVER, quite a jump for me). On Intel side, most is made from HEDT and up and the top consumer chips ($280+). The rest is pretty much just salvage so you don't lose all those hard earned TOP END dollars. AMD needs to stop pricing like they're trying to get us into bed...LOL. Quit trying to get us to like you. PRICE LIKE INTEL/NVDA if you're on top! OR, $18 stock price down from $34 in a month. You should be making 300-500mil a Q and more once Zen2 7nm stuff hits server/desktops. If you get that pricing wrong too, you deserve to make nothing and hopefully get bought so someone with real management skills can price their way to REAL competition financially! You know, with a billion a year NET or more!
Manch - Thursday, October 25, 2018 - link
Shut up Stewie.HStewart - Thursday, October 25, 2018 - link
Personal name attack should not be part of this discussion and in my opinion very child like.PeachNCream - Thursday, October 25, 2018 - link
Is English your native language?Manch - Thursday, October 25, 2018 - link
If you haven't figured it out, I don't care about your opinion. You're an Intel shill and bring nothing to the discussions on here. You're only here to shit post. You and your rants are tiresome.Dragonstongue - Thursday, October 25, 2018 - link
Does AMD generate an acceptable amount of cash through operations?AMD’s debt level has been constant at around US$1.40B over the previous year made up of current and long term debt. At this stable level of debt, AMD currently has US$1.19B remaining in cash and short-term investments , ready to deploy into the business. Additionally, AMD has produced US$68.00M in operating cash flow over the same time period, leading to an operating cash to total debt ratio of 4.87%, meaning that AMD’s debt is not appropriately covered by operating cash. This ratio can also be a sign of operational efficiency as an alternative to return on assets. In AMD’s case, it is able to generate 0.049x cash from its debt capital.
Does AMD’s liquid assets cover its short-term commitments?
With current liabilities at US$1.49B, it seems that the business has been able to meet these obligations given the level of current assets of US$2.62B, with a current ratio of 1.76x. Usually, for Semiconductor companies, this is a suitable ratio since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
(source google search)
just like countries and "banking" in general, debt is actually a good thing because it means you are spending money on investments, portfolio, RnD and the like, as long as what you are bringing in keeps you in the "black" it does not matter how much "red" you have, in this case, AMD has been profitable for the past 6 quarter or so and has pretty much paid back the vast majority of long term debt levels and is now "maintaining" their expected debt load.
Dr Su is one smart lady.
HStewart - Thursday, October 25, 2018 - link
Dt Su is probably smart in deceiving some people that AMD can use it fan based to bad mouth the competition and at same time spend more money than they worth, AMD's purchase of ATI was the first stage of AMD going into debt - and investing in Zen architecture and focusing on the gaming nd mining world maybe seem smart in the short term - but in the long run it will destroy them.Lets be very honest and don't blame Intel licensing - have you gone into a local BestBuy, how many desktop machines do you find compared to laptops. Dr Su is lost sense of Reality.
FullmetalTitan - Thursday, October 25, 2018 - link
So when other users tell you to shut up it's because of this. You didn't even respond to the analysis Dargonstongue provided, instead you just called the AMD CEO a liar and deceiver, and accused them of slander.We all get that you have a permanent brown nose from kissing Intel ass, but you can't blame others for being fed up with your garbage when it's basically your whole deal on this site.
Manch - Thursday, October 25, 2018 - link
FullmetalTitan, you hit the nail on the head!HStewart - Thursday, October 25, 2018 - link
I think you try to make doing something that I didn't do - I didn't say Dr Su is a liar - but instead I base on what Dragonstongue statement is that may not be so smart. You can actually go to AMD financial statements and see the processing of debts - or simple search AMD Debt on the internet.But interesting at this current time 15:43 EST Intel stock is up 5.14% and AMD is down 16.54%
so it obvious is looking at AMD numbers and seeing red. Yes Intel stock got hurt by Spectre/Meltdown stuff - but if look at there stock in 5 year plan you will notice that It is same level as Nov 2017 - which looks like Intel has recovered from it. On the other side, look at AMD and you will see that very rapidly AMD lost the gain that AMD gain last summer.
FullmetalTitan - Thursday, October 25, 2018 - link
"Dt [sic] Su is probably smart in deceiving some people that AMD can use it fan based to bad mouth the competition."Not sure how else to read this than Dr. Su is manipulating facts (lying) to advantage her company, while spreading false statements about competition.
I think most readers here understand that 'the investors' are all thin skinned babies that will dump a stock following a 0.001% miss on earnings guidance, only to pick it back up on rebound.
More to the point, my ear on the ground in semicon manufacturing only ever hears about Intel engineers jumping ship for various foundry and design companies, never those from AMD. I trust the actual industry professionals 100x more than I do the C-suite and investors when it comes to company health.
HStewart - Thursday, October 25, 2018 - link
It is all based on AMD statement and the current stock - just search for stock and look at past 8 years and compare difference between Intel and AMD.,Oh the random generator - stock market change - AMD is only down 15.45% and intel is only up 4.46%
https://www.bing.com/search?q=AMD+Stock&filter...
HStewart - Thursday, October 25, 2018 - link
Of course we have Raju from AMD and now in Intel.Targon - Thursday, October 25, 2018 - link
Intel executives are doing a good job at making people badmouth their own company. Did Intel CPU performance go up significantly between 2013 and 2017, or was it largely stagnant? It took Ryzen in order to wake Intel up and start actually trying to do anything.AMD purchased ATI just prior to the recession which caused the entire stock market to go down significantly. If the timing had been a year later in 2008 after the recession hit, the purchase price would have been a lot lower. These things happen in business, but AMD survived it. Lisa Su has done an amazing job of setting a direction for the company, get the CPU business back to being properly competitive again at the high end, and then use the resulting money to get the graphics division back on track(expectation of 2020 for when the next true all-new GPU architecture will come out from AMD).
You are only deceiving yourself if you think that AMD isn't on the verge of going from continually struggling to being seen as a true leader.
just4U - Wednesday, October 24, 2018 - link
I am actually quite fine with the AMD side of the GPU market. You can finally pick up Vega cards at a half ways decent price and their multi purpose. The 580 is still excellent for gaming as well.. and again is coming in at reasonable prices. Looking thru local stock, there isn't a lot there but at least you can walk in to a store and buy one.Amd should be looking at their next gen as Nvidia has it's top guns out already and many are not happy with the pricing.. but with many gamers already having some pretty good graphic setups right now there isn't a lot to be all that thrilled about (upgrade wise) so .. whatever it is what it is. If your on a old system nows the time to get that much needed upgrade.
Yojimbo - Thursday, October 25, 2018 - link
Oooh, AMD stuffed the channel.Now the Q2 discrete GPU market share from Jon Peddie Research makes sense. How come NVIDIA knew 3 months ago that cryptocurrency demand had dried up and AMD only discovered it now? AMD gave themselves a stellar Q2 by pushing forward revenue from Q3 and Q4. Wonder what sort of insider trading has gone on at AMD over the past 3 months.
Lord of the Bored - Thursday, October 25, 2018 - link
nVidia didn't see as big a boom from the buttcoin diggers as AMD in the first place, because AMD cards are actually better at buttdigging. During the peak of the buttdigger craze, I could still find green video cards at inflated prices, but every red card of even remotely decent specs was just empty shelf space.Yojimbo - Thursday, October 25, 2018 - link
NVIDIA had roughly 50% of the revenue from crypto. The reason NVIDIA cards had greater availability is because NVIDIA had more liquidity because they owned 80% of the gaming market. They could be more certain they'd sell through the cards if crypto evaporared so they didn't have to be so conservative with their production.Regardless, it's not that important. The ethereum global hashrate shows when crypto demand dried up. And when it dried up it dried up for both NVIDIA and AMD.
Yojimbo - Thursday, October 25, 2018 - link
Oh, and another thing that shows pretty clearly that AMD is trying to he sneaky here. Even if AMD actually still saw strong crypto demand in Q2, the fact that NVIDIA's demand completely dried up in Q2 should make it impossible for them to be surprised by crypto drying up for them in Q3.neblogai - Thursday, October 25, 2018 - link
Where are you getting 'AMD is trying to be sneaky'? Their Q3 results are as expected, only with better gross margin:'For the third quarter of 2018, AMD expects revenue to be approximately $1.7 billion, plus or minus $50 million (/it is 1653M), ... GAAP gross margin to increase to approximately 38 percent (/increased to 40%), driven by the sales growth of Ryzen and EPYC products, partially offset by lower sales of GPU products in the blockchain market'.
And- it they produced more Polaris chips than needed- then that will not go to waste, as they are not releasing a replacement for them for another ~9months at least. And, a lot of their SKUs are still very much overpriced in many markets of the world, meaning- there is not enough of them being delivered.
silverblue - Thursday, October 25, 2018 - link
And yet, despite meeting or exceeding expectations, AMD's share price has tanked by a quarter within less than 24 hours, with what Business Insider describes as "AMD is getting smoked after revenue misses, guidance falls short". They must've been reading something different to the rest of us.silverblue - Thursday, October 25, 2018 - link
To clarify, I'm referring to the revenue "miss" and not the guidance.FullmetalTitan - Thursday, October 25, 2018 - link
Exact same thing happened after Q2 earnings report, for missing guidance by a few $M due to crypto demand drying up. They acknowledged that loss of market back in July, so I don't know what Yojimbo is going on about them deceiving investors with predictions of crypto profits in Q3Yojimbo - Thursday, October 25, 2018 - link
"Exact same thing happened after Q2 earnings report, for missing guidance by a few $M due to crypto demand drying up. They acknowledged that loss of market back in July, so I don't know what Yojimbo is going on about them deceiving investors with predictions of crypto profits in Q3"If they acknowledged it in Q2 then it's even worse, isn't it? Because then they should have told investors that their channel was full and the weak GPU demand should not have been a surprise.
From the Q3 conference call, Lisa Su said: "Third quarter revenue was $1.65 billion, an increase of 4% from a year ago. Looking at our Computing and Graphics segment, third quarter CG segment revenue increased 12% year-on-year, driven by significant growth in both client processor and OEM GPU sales that offset a larger-than-expected decline in channel GPU sales."
So why were the GPU sales declined larger than expected if they knew about it in Q2?
Later she reiterates: "Channel GPU sales came in lower than expected, based on excess channel inventory levels, caused by the decline in blockchain-related demand that was so strong earlier in the year."
Later, when answering a question: "We are expecting that it might take a couple quarters to completely get back to, let's call it, a normal channel. However, it is factored into our Q4 guidance."
If they knew "blockchain" was drying up then why did they fill the channel? They thought their 2 year old cards that only managed to capture 20% of the gaming market before crypto would suddenly be in high demand with gamers? And if the channel was filled because of an expectation for more sales in Q2 and they knew those Q2 sales never came then they already knew it would become filled when they made their Q2 conference call. Why didn't they tell people their channel would be filled then?
FullmetalTitan - Thursday, October 25, 2018 - link
I will give you the benefit of the doubt re: guidance on blockchain. I swear I read in their Q2 report that they had pegged crypto-related GPU sales as a "negligible component" of revenue going forward, but I can't seem to find it now.As for speculation on increased GPU production leading to an excess of inventory, I think there were multiple factors involved in that decision based on the market demands early in the quarter. I concede that they may have been bullish on blockchain demand for GPUs, but I suspect the story is more complicated, especially given that supply lead times for a GPU are ~3-4 months from wafer fab in to packaging/shipment. Unless they had actually adjustment production well ahead of the Q2 report then we would only expect the bump in volume to hit shelves around September, a time frame that sets them up for failure because of NVIDIA announcements of Turing.
Targon - Thursday, October 25, 2018 - link
I can explain why things didn't happen as expected, the timing of the NVIDIA RTX series of chips. Many people decided to put any GPU purchase on hold until after the launch of the new NVIDIA chips. If you hear that Ford has a really new and revolutionary truck engine that will show up in the 2020 model year trucks, anyone who pays attention to trucks and knows that Ford has some knowledge of the industry will go into a "wait and see" mode, unless they need to purchase immediately or can't wait for whatever reason. As a result, not only will Ford sales drop on the rumors of new engines, but competing truck makers will wait, just to see if the rumors/hype are true. It may not even change their choice, but they WILL wait, just because that is what so many others will be doing.That is also why it will take 1-2 quarters, because people have still been waiting to hear about if ray tracing will even be implemented by game developers, or if DLSS will actually make enough of a difference to justify the higher prices of the new NVIDIA cards. Will there be a 7nm Vega that might be competitive in gaming? All of these things are working against AMD on the GPU side.
I can definitely say that as long as AMD releases Ryzen 3rd gen in Q1, sales will be high enough to overcome any soft GPU sales figures.
Yojimbo - Thursday, October 25, 2018 - link
No, Their Q3 results were not as expected. They missed on revenue."Third quarter revenue was $1.65 billion, an increase of 4% from a year ago. " As you pointed out, guidance was $1.7 billion.
And their Q4 guidance is significantly lower than expected. They guided $150 million less than analysts expected.
"And- it they produced more Polaris chips than needed- then that will not go to waste, as they are not releasing a replacement for them for another ~9months at least."
That's not the point. The point is shady practices by management that obscure a view of that company's business from its shareholders. Using the channel to hit numbers is against SEC regulations. It's what the CEO of Krispy Kreme was forced to resign over in about 2004. Stock price manipulation by management is a serious issue, it doesn't matter if that inventory will eventually be sold (and in the most extreme cases it may not be, because the company may be allowed to go bankrupt after the management has cashed in).
neblogai - Thursday, October 25, 2018 - link
Guidance was 1.650 to 1.750B, and with crypto sales ending, AMD made 1.653B, so within the guideline. Now, of course, this is on the low end- but had the crypto stayed relevant- AMD would have had extra revenue right on top of this 1.65B point. They made inventory for it. Sales to miners did not happen in Q3. But if you say that end of crypto was not a surprise to AMD (as if they could have known in Q2 what is going to happen)- it should not have been a surprise to investors either (I'm talking about the stock price drop only today, while crypto was dormant all Q3).Yojimbo - Thursday, October 25, 2018 - link
"Guidance was 1.650 to 1.750B, and with crypto sales ending, AMD made 1.653B, so within the guideline."It doesn't work that way. Not when a company's stock price is up over 150% YTD, it's selling at rich price to earnings and price to revenue ratios and that guidance itself already represents only a 4% year over year revenue increase. And everyone concerned knows it doesn't work that way.
"it should not have been a surprise to investors either"
So the investors shouldn't have believed AMD at their Q2 conference call. On that I completely agree with you. The stock never should have been bid up to 34 dollars a share. Personally I think 12 makes sense. But it's really hard to know. It's hard to get a good picture of Ryzen because they hide it with their GPU revenue and crypto helped them do that.
Holliday75 - Thursday, October 25, 2018 - link
Yojimbo, who do you write for? I want to follow your financial guidance because you are the only person I have ever read claiming what you claim. The rest of the "experts" are either idiots or lying.Targon - Thursday, October 25, 2018 - link
A lot of what makes a stock price go up comes from expectations for the future of the company, as well as for the stock price itself. Looking at the position AMD is in on the CPU side, you have AMD gaining ground in CPU market share as well as mind share, where more consumers are gaining awareness of AMD and AMD products. On the server side, getting market share becomes easier as hardware makers become more familiar with the products.Looking at projections of Intel, where capacity issues are causing shortages, not having 10/12nm based processors until Q4 2019 at the earliest, and a general feeling that Intel is losing its competitive edge, AMD looks better as well.
So, if AMD gets 7nm Ryzen processors going out to consumers by April of 2019, AMD will be gaining a lot of market share and income, at the expense of Intel.
On the GPU side, AMD isn't talking a lot, because Navi isn't expected to come out until the second half of 2019. This means that AMD is going to try to get that inventory level down before they announce their next generation part. They will NOT announce that Navi may be ready in June, because that will trigger consumers to wait on purchases and make it tougher to sell through that inventory. Remember NVIDIA having problems selling through all those 1000 series chips? The same applies here, but NVIDIA was stupid in releasing the RTX cards before they got rid of enough of that inventory.
Too many people get fixated on one product category, and they lose sight of the big picture. Analysts are only interested in short-term stuff, they couldn't have comprehended how well Ryzen would do for AMD as a whole in Q2 2017, because they don't care about the quality of products, they don't understand what even one amazing product release can do for the long-term prospects for a company. The very concept of gaining traction when it comes to selling server processors is beyond their comprehension, even though it is like the process of trying to clear out the short sale people who keep pushing down stock prices, and once you hit a certain "critical mass", suddenly things will improve.
The very momentum that you talk about when it comes to stock price, and what SHOULD hold a stock price back is exactly in that same area, getting people either impressed by a company and driving up stock price, or people not seeing the potential growth within the company, because they have a vested interest in the competition.
AMD stock DOES deserve to be up at the 34 dollars per share level, but it will take another two quarters, time for Ryzen 3rd generation to be released in order for news of AMD really having a product that will beat Intel in all areas for them to realize it.
Remember, these same analysts are the ones who keep driving up Amazon, Apple, and other highly hyped stocks. Those stocks don't deserve those high prices or market caps either, but they get them because of the hype. Another recession will knock these companies down a LOT, while AMD and Intel won't lose too much by comparison.
Targon - Thursday, October 25, 2018 - link
How many GPUs did NVIDIA end up having stuck in inventory before they just accepted it and just released the RTX cards anyway? RTX card launch stalled sales of video cards for both AMD and NVIDIA, but NVIDIA has new cards to generate income, AMD won't have a big GPU launch until July of next year at the earliest.