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  • The Long Case For Advanced Micro Devices, Inc. 8 comments
    Jan 13, 2014 6:14 PM | about stocks: AMD, NVDA, INTC

    Elevator Pitch

    AMD knows its market, and Nvidia is starting to panic. A REAL gamer's perspective on the future.

    Thesis & Catalyst For Advanced Micro Devices, Inc. (NASDAQ:AMD)

    I have been an avid gamer for around 24 years now. I started out as a console gamer and worked my way into PC gaming. I have been investing over the last year and following the chipmakers extensively during that time. I believe there are many huge items that everyone seems to be overlooking in AMD's favor.

    Where to begin:

    CPU's/Processors: AMD vs Intel

    Any gamer worth his salt has two monitors and runs a plethora of other programs while they are gaming. Some other programs include: Streaming, Movies/Music, VOIPs, and Browser Windows. Yet all the benchmarks comparing processors are usually only depicting single application performance, which tends to skew Intel's direction. However, when you add in the multiple programs you start seeing a trend that AMD pulls ahead significantly. I am not just stating this as a mere opinion, I challenge you to search youtube and other sites. You will find creditable reviewers and pc aficionados measuring this effect. It is only a matter of time before the veil of Intel is lifted and the enthusiasts start seeing that not only will they save a boatload of money switching to AMD, but they will see their performance increase as well.

    While many people argue about the power used and the thermal dynamics of the AMD processors, I ask you "What enthusiast cares about an energy bill or doesn't use aftermarket thermal solutions?" The answer is none, nearly every enthusiast will use an aftermarket cooling solution and is not pressed for several dollars a year for their energy bill. That alone renders Intel's benefits nearly null.

    https://www.youtube.com/watch?v=eu8Sekdb-IE

    GPU's: AMD vs Nvidia

    While I have been a long time supporter of Nvidia GPU's I can no longer support their business. They overprice trivial performance gains generation to generation. They also fall into the same boat as Intel when it comes to enthusiasts. Many arguments against AMD refer to their reference coolers, but which enthusiasts aren't going to upgrade the cooling or purchase a card style with a more advanced cooling system? That's right once again the answer is NONE, no enthusiast who is spending upwards of $300.00 on a GPU is going to buy a stock style version with a reference cooler. I ask you to delve into benchmarks and examine what you see, you will find that AMD will always win on a $/performance ratio. Nvidia has lost touch with their market, the Geforce Experience has been a pretty unspoken failure in my opinion. Often times when I am running games the GeForce experience turns the graphics levels up to a level that creates awful framerates rendering the experience an awful one. They are also adding a streaming feature, because they recognize the amount of gamers that are now streaming their games. This would be good if gamers weren't already comfortable with programs like xsplit and OBS. Nvidia you have to give us a reason to leave behind software that already works great that we are already comfortable using.

    Nvidia running scared:

    Lately the marketing department at Nvidia has been relentless in portraying AMD in a negative light. This tells me they are afraid of what the revitalized AMD means to their business.

    The first attempt at scaring customers: Computers are now much faster than consoles

    This would be relevant if every pc gamer in the world didn't already know that. This is old news, pcs have always been able to play faster than consoles as they have a infinite ability to be upgraded and tuned. Nvidia is just bringing this up now as they have lost out to AMD on all consoles. Why Nvidia should even be more scared! We are seeing that many games now are designed for consoles and then rolled out to PC's. With AMD in control of the consoles this gives them the ability to be optimized for games easier than Nvidia.

    Second attempt at scaring customers: G-sync and screen tearing

    Nvidia then tried to scare games by deploying their new G-Sync technology, this technology would only function correctly with Nvidia Gpu's. If you don't know about screen tearing it is when your GPU send out frames at a much higher speed than your monitor can handle. There is a simple solution for this, simply scale down things.

    The final Marketing ridiculousness was the crop circle Nvidia created to announce their new chip. A statment they used in reference to the crop circles was, "its from out of this world" When in actuality it is not impressive; it is just a scaled down version of their GPU chip. It would have been a better strategy to create the Crop Circle digitally with their new tiny chip through video editing.

    If you are still here with me I think you get the point by now. AMD is going to be huge in 2014 and moving forward, they are actually creating new strategies and technology to improve things. Whereas Intel and Nvidia strategies have just been to add more or scale down their current chips. All of us gamers are buying AMD this year, why aren't you doing the same as an investor?

    Disclosure: I am long AMD, INTC, .

    Stocks: AMD, NVDA, INTC
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Comments (8)
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  • GAlan
    , contributor
    Comments (652) | Send Message
     
    Is the gaming population world wide enough to move the earnings needle of AMD even if 100% of them agreed with you?
    13 Jan 2014, 07:13 PM Reply Like
  • barantos
    , contributor
    Comments (641) | Send Message
     
    Author’s reply » well when you look at console sales combined with the only market nvidia really caters to is the gaming market and AMD is biting into it. Nearly all of Nvidia's competitive GPU lines are designed for gaming. Their workstations aren;t competing with the fire pro's. This makes the logical conclusion that if Nvidia is considered successful, and a majority of their profits are generated from gaming GPU's; then Gaming GPU's earn well.
    14 Jan 2014, 10:06 AM Reply Like
  • inside man 55
    , contributor
    Comments (1617) | Send Message
     
    Thanks barantos for the gaming perspective. If this is true in Western Economies AMD is going to be even bigger in China.

     

    May I ask what is your reason for being long Intel given what you wrote?
    13 Jan 2014, 09:08 PM Reply Like
  • barantos
    , contributor
    Comments (641) | Send Message
     
    Author’s reply » The reason I am long intel, is I think that they will move into mobile pretty successfully in the next couple of years. I think they are poised pretty to just scale down and bring x86 to mobile.
    14 Jan 2014, 10:02 AM Reply Like
  • Will347
    , contributor
    Comments (133) | Send Message
     
    OK THANK YOU SIR. I mean, there's a lot of crapola, speculation, marketing, fear, short sellers, a uniquely AMAZING amalgam of BS, a near impenetrable wall, to cut through to get a clean scoop like this. And if you're long, perhaps you should be: here's a central quote of analysts Dec 16 in a downgrade:

     

    "AMD PC/graphics sales are likely to continue falling faster than PC units as INTC leverages its vast manufacturing/cost advantage to aggressively and profitably capture low-end share. Meanwhile, NVDA's competitive graphics position remains as dominant as ever."

     

    IMO, every SINGLE one of those statements is exactly backwards. Anyway, thanks for the genuine perspective.

     

    Any thoughts on Kaveri? I'm considering Kaveri's target market a cheap upgrade path for Chinese/Asian gamers in an upgrade cycle, and attracting new blood to gaming there via an unbeatable pricepoint for a new "gaming system". Any thoughts appreciated :)
    17 Jan 2014, 05:26 PM Reply Like
  • barantos
    , contributor
    Comments (641) | Send Message
     
    Author’s reply » for Kaveri I would have to see more release benchmarks and price points before I determine its potential influence.
    18 Jan 2014, 10:23 PM Reply Like
  • inside man 55
    , contributor
    Comments (1617) | Send Message
     
    Thanks for the reply, I don't doubt Intel will get into mobile in the next couple of years, I am not sure if the potentially lower mobile margin / high volume will offset declining to flat PC and Server sales, especially if they have to ramp up subsidies.
    19 Jan 2014, 10:58 PM Reply Like
  • stockalicious
    , contributor
    Comments (424) | Send Message
     
    @GAlan
    "Is the gaming population world wide enough to move the earnings needle of AMD even if 100% of them agreed with you??

     

    yup! Gaming is not going to be a 2k investment going forward - AMD is positioned to take share here - along with workstations, servers, dGPU's ect
    13 Jan 2014, 10:40 PM Reply Like
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