AMD (NYSE:AMD) has had more comebacks than Lindsay Lohan, and just as many failed ones.
Yet each time it rises, there are people who pile in. Maybe because the company always looks cheap as chips, and maybe because we just want to believe.
The company has had three "false dawns" in the last decade. The best of them was in 2004-05, when AMD beat Intel to the low-power, multi-core processor market. But things also seemed to be getting better in 2009, after AMD spun out its chip foundry, and in 2011, when it sought to wow Chinese OEMs, only to fall back to Earth.
Earth in this case is a price of $2.47, a total market cap of $1.76 billion. That's a little more than Ancestry.Com fetched last year. When you're worth less than a Web site, and you're supposedly in the business of making semiconductors, the name for that situation is dire.
But not to worry - AMD is getting the band back together. Charles Matar, Wayne Maretsky, and Jim Keller, who led the company's work in low-power designs in the last decade, are back at the company. There is growing speculation that Sony, or Microsoft, or both might turn to AMD for new game console chips. Or maybe it can get its low-cost ARM-based designs into cheap cloud server boards.
So here is what is going to happen. Sometime in the next six to nine months you're going to read about some big design wins, some new products being built using AMD chips. If you want to speculate the rumor. Then sell the news.
History says you can make as much money on a false dawn as much as on a real one.