AMD soars; Street likes console strength, improved PC outlook

We believe [AMD's] 'under the radar' transition story is a key driver of value, although potentially messy," writes FBR's Chris Rolland, reiterating an Outperform and upping his PT to $6. "While structural PC headwinds are discouraging, we believe that AMD’s (AMD +12.6%) non-PC segments will more than replace lost PC revenue over the next few years."

Nomura (Neutral) is pleased with the pace of next-gen console sales - Sony and Microsoft have announced 12M sales between them - and notes prior-gen console sales only totaled 7M-9M at a similar point in time.

Bernstein is staying bearish: The firm estimates AMD's core PC/console EPS power is around $0.20, and doesn't see revenue from ARM server CPU sales and new semi-custom wins ramping until 2016.

AMD mentioned on its CC (transcript) it now expects global PC shipments to fall 7%-10% in 2014 vs.a prior 10%; IDC and Gartner think a smaller decline was seen in Q1. The company also mentioned its first ARM server CPUs (codenamed Seattle) will begin shipping in Q4. AppliedMicro, Marvell, and Cavium will be among the chipmakers providing competition.

19% of the float was shorted as of March 31. Only 7 of the 26 analysts covering AMD are currently bullish; 13 are neutral, and 6 bearish.

Q1 results, guidance/details

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Comments (18)
  • Ravinder71
    , contributor
    Comments (45) | Send Message
    AMD $8.35 around Jan 20th 2015.
    21 Apr 2014, 02:38 PM Reply Like
  • JYX
    , contributor
    Comments (33) | Send Message
    boom boom pow!
    21 Apr 2014, 02:43 PM Reply Like
  • june1234
    , contributor
    Comments (4504) | Send Message
    19% short = lot of nervous shorts. won't take much to get them going
    21 Apr 2014, 02:43 PM Reply Like
  • 3D Investing
    , contributor
    Comments (1552) | Send Message
    Bernstein is so off about AMD as usual. EPS will beat 20 cents this year. He's crazy to think ARM server CPU and semi-custom doesn't ramp until 2016. It's obvious it's 2015. That's how they're going to get 50% growth market revenue by 2015.
    21 Apr 2014, 02:45 PM Reply Like
  • King Rat
    , contributor
    Comments (1902) | Send Message
    Perhaps "core" excludes GPU or he is factoring in some expected non-cash write-down. I, for one, am out of any chip companies now, but I am eager to see HSA take shape and hope AMD has a big part in it. Successful HSA would pave the way for future processors to be simple 1000 core+ chips using 1/10th the power of current CPUs while providing much higher performance. What that will come down to, however, is developers developers DEVELOPERS DE-VE-LO-PERS! Developers (voice cracks) DEVELOPERS DEVELOPERS!
    Looks like Steve Ballmer was right.
    21 Apr 2014, 02:56 PM Reply Like
  • Justin Jaynes
    , contributor
    Comments (3155) | Send Message
    nice steve ballmer reference
    21 Apr 2014, 03:36 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (20091) | Send Message
    Stacy Rasgon missed the call and then the boat.


    Nevertheless, consoles aren't everything. Rory Read and Lisa Su hinted at more deals akin to Verizon two quarters ago; I like to see them materialise in the near term as well as some clever debt management to appear on AMD's balance sheet.
    21 Apr 2014, 02:47 PM Reply Like
  • wrscomncents
    , contributor
    Comments (1083) | Send Message
    Bernstein is staying bearish: No way. I can't believe that.
    21 Apr 2014, 02:54 PM Reply Like
  • kjurden
    , contributor
    Comments (1924) | Send Message
    Stacy Ras"goon" won't be able to continue to hold a bearish outlook much longer on's just a matter of time until those that do (I'm not one of them) listen to him, recognize how much of an opportunity (money) they've lost due to his negatively biased reviews of AMD!
    Just another analyst that has no credibility..Imagine that.
    21 Apr 2014, 03:02 PM Reply Like
  • JYX
    , contributor
    Comments (33) | Send Message
    "Others were not so charitable. Bernstein Research’s Stacy Rasgon today reiterates an Underperform rating on Intel shares, and an $18 price target, reiterating a view that he has expressed before, namely that “Intel is undergoing the beginnings of a structural business model transition that carries significant risk.”


    hahaha, interesting analyst
    21 Apr 2014, 03:04 PM Reply Like
  • theboys
    , contributor
    Comments (96) | Send Message
    I wonder what this analyst thought about MU when it was floundering to survive for many years? Or how about Seagate or Western Digital, two companies that supposedly were dead by the experts. I even made significant money for years with XRTX. These guys are dopes. I am glad I never listened to the "experts".
    21 Apr 2014, 03:23 PM Reply Like
  • Chris Lau
    , contributor
    Comments (4284) | Send Message
    $6 is a target price I've floated around for quite a while now. Congrats to all the longs whio believe in the transitioning in AMD's business.
    21 Apr 2014, 03:05 PM Reply Like
  • User 12115671
    , contributor
    Comments (2873) | Send Message
    Ya 6 seems to be the target, so the actual price will likely float around 5 not to far out.
    21 Apr 2014, 03:09 PM Reply Like
  • theboys
    , contributor
    Comments (96) | Send Message
    It is nice to see AMD get a touch of respect. They are not at all out of the woods, but clearly they have a plan and are slowly implementing it. They need a bit of luck like MU got to give them a big chance of success. I am long, but expect this year to be a but of a ride. There are plenty of naysayers.
    21 Apr 2014, 03:26 PM Reply Like
  • geekinasuit
    , contributor
    Comments (3333) | Send Message
    A few more confirmed semi-custom wins and there won't be any bearish arguments left that can claim to have a sense of credibility. The micro/dense server concept isn't a fad, the only valid question is when will it take off enough to make a dent in the bottom line? If Verizon has success with their deployment, you can bet others will follow in quickly with their own competing solutions. If anyone wants an "edge" or wants to differentiate from the competition, they can go with a semi-custom solution (provided their pockets are deep enough). I cannot see AMD's strategy failing, it all fits into place nicely.
    21 Apr 2014, 04:54 PM Reply Like
  • Arvinpinal
    , contributor
    Comments (519) | Send Message
    heading to $8 range is very possible !!
    21 Apr 2014, 05:11 PM Reply Like
  • Sean Chandler
    , contributor
    Comments (734) | Send Message
    lol.. Bernstein.


    AMD's low market share in the PC market can be considered advantageous in a falling PC market. One big win will be significant. It'll lead to another, then another - and the momentum AMD will need will be there.


    The only thing disappointing is that it's not 2016 yet.
    21 Apr 2014, 05:34 PM Reply Like
  • geekinasuit
    , contributor
    Comments (3333) | Send Message
    "The only thing disappointing is that it's not 2016 yet."


    So true. However, getting in now means more profits later, assuming you can wait for that long.
    21 Apr 2014, 07:24 PM Reply Like
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