Fri, Apr. 17, 6:51 PM
- "AMD’s model appears to be breaking, as we now have them burning substantial amounts of cash," writes Bernstein's Stacy Rasgon, reiterating an Underperform following the CPU/GPU vendor's Q1 miss and soft Q2 guidance. "Frankly, this call is getting depressing. But, we see little reason to step off of it."
- Rasgon doesn't see AMD going bankrupt (no major debt payments are due before 2019), and likes its improved inventory management. But he also thinks the company will be in "serious trouble" if PC demand doesn't stabilize later this year thanks to improved inventories and Windows 10.
- He also notes AMD's 20% Q/Q and 38% Y/Y PC CPU/GPU division sales drops compare with 16% Q/Q and 8% Y/Y drops for Intel's PC/mobile CPU unit. "This continues to suggest continued share losses by the company (though this should hardly be shocking at this point)."
- Ascendiant's Cody Acree, who downgraded to Hold: "In addition to a relatively weak macro computing environment, we believe AMD’s gross and operating margin leverage will likely also be constrained. We believe CPU and GPU pricing from both INTC and NVDA will continue to be aggressive and that AMD’s semi-custom business will only support modestly higher margins as pricing declines meet console volume increases."
- Though maintaining an Outperform for now, Wells Fargo's David Wong now forecasts losses for the rest of 2015, and also through 2016. He sees profits eventually returning on account of AMD's engineering expertise. Oppenheimer notes gross margin (down in Q1) is expected to be flat Q/Q in Q2, and thinks new semi-custom wins are unlikely to ramp before 2H16.
- Jefferies' Mark Lipacis (Buy) is hoping improved PC/console demand and the launch of AMD's anticipated Fiji GPUs provide a 2H15 lift. He also expects AMD to use its May 6 analyst day to "articulate its first long-term strategy and business model in years."
- Shares fell 10.3% in regular trading to $2.58. The 52-week low is $2.14.
- Yesterday: AMD's Q1 results, guidance/details
Fri, Apr. 17, 12:45 PM
Fri, Apr. 17, 9:21 AM
Thu, Apr. 16, 4:56 PM
- In addition to missing Q1 estimates, AMD is guiding for Q2 revenue to be down 3% Q/Q (+/- 3%). That implies a range of $970M-$1.03B, below a $1.13B consensus.
- The company also announces it's "exiting" its high-density server business, the fruits of its $334M 2012 acquisition of SeaMicro. No word yet on whether AMD is seeking a buyer for SeaMicro, which has faced direct competition from HP (via its Moonshot servers) and indirect competition from the do-it-yourself hyperscale efforts of Internet giants. $75M worth of charges were taken in Q1.
- Computing/graphics segment (PC CPU/GPU) revenue fell 38% Y/Y in Q1 to $532M (PC weakness, share loss). PC CPU ASPs fell Q/Q and rose Y/Y. GPU ASPs rose Q/Q and fell Y/Y. The division had a $75M op. loss.
- Enterprise/embedded/semi-custom revenue (includes console APUs) fell 7% Y/Y to $498M due to lower server CPU sales (share loss). The division had a $45M op. profit.
- Gross margin (non-GAAP) remained under pressure, dropping to 32% from Q4's 34% and Q1 2014's 35%. Cost cuts led R&D spend to drop 13% Y/Y to $242M, and MG&A spend to fall 16% to $131M. AMD ended Q1 with $906M in cash (down $134M Q/Q) and $2.27B in debt (up $56M Q/Q).
- Shares have fallen to $2.63 AH. They rose 6.3% in regular trading ahead of earnings.
- Q1 results, PR, CFO commentary (.pdf), slides (.pdf)
Thu, Apr. 16, 4:16 PM| 26 Comments
Thu, Apr. 16, 2:58 PM
- AMD has rallied strongly ahead of this afternoon's Q1 report. 15.2M shares have been traded vs.a 3-month daily average of 16.7M.
- With 103.2M shares (16% of the float) shorted as of March 31, short-covering could be playing a role. Following a rough 2014, the CPU/GPU vendor is up 29% since it provided better-than-feared guidance on Jan. 20 to go with a slight Q4 EPS miss.
Wed, Apr. 15, 5:35 PM
Thu, Apr. 9, 6:03 PM
- As Intel's (NASDAQ:INTC) March 12 warning led many to expect, PC sales were weak in Q1: IDC estimates shipments fell 6.7% Y/Y to 68.5M, a much sharper drop than Q4's 2.4% and Q3/Q2's 1.7%. Gartner estimates shipments fell 5.2% to 71.7M. With IDC also reporting of price pressure, revenue declines might be larger.
- IDC: [T]he Q1 market faced multiple headwinds – including inventory build-up of Windows Bing based notebooks, commercial slow down following the [Windows] XP refresh and constrained demand in many regions due to currency fluctuations and unfavorable economic indicators." Gartner thinks sales of "mobile PCs" (notebooks, convertibles, and Windows tablets) rose, while desktop sales fell sharply. "PC replacements will be driven by thin and light notebooks with tablet functionality."
- Both Gartner and IDC report U.S. PC shipments fell only ~1% Y/Y. On the other hand, IDC thinks Japan (another high-ASP market) saw shipments fall 44%; strong Q1 2014 spending prior to a tax hike made for tough comps.
- Market leaders Lenovo (OTCPK:LNVGY) and HP (NYSE:HPQ) continued taking share from firms with less scale: IDC estimates Lenovo's share rose to 19.6% from 17.6% a year ago (3.4% unit growth), and HP's to 19% from 17.1% (3.3% unit growth).
- #3 Dell's share rose to 13.5% from 13.4%; #4 Asus (OTC:ASUUY) was flat at 7.1%, and #5 Acer (OTC:ASIYF) rose to 7% from 6.3%. Everyone else collectively fell to 33.9% from 38.4%.
- Unlike in Q4 and Q3 (seasonally stronger quarters for the company), Apple (NASDAQ:AAPL) wasn't in the global top-5. IDC estimates the company's US. unit share rose to 10.9% from 10.6%, good for fourth place (revenue share is higher).
- Other PC industry names: MSFT, AMD, NVDA, MU, STX, WDC, HTCH
Wed, Mar. 25, 12:03 PM
- Chip stocks are particularly hard-hit (SOXX -3.6%) on a rough day for tech. The Nasdaq is down 1.3%, and the S&P 0.7%. Going into today, good earnings reports and ongoing M&A activity had led the Philadelphia Semi Index to rise 10% from its Jan. 30 close; the index remains up nearly 2x from its fall 2012 lows.
- AMD (AMD -7.2%) is a major decliner following a UBS downgrade. AMD rival/GPU giant Nvidia (NVDA -5.2%) and memory giant Micron (MU -3.7%) are also selling off, as are merger partners NXP (NXPI -3.8%) and Freescale (FSL -3.4%), RF chipmakers Avago (AVGO -5.2%), Skyworks (SWKS -5.3%), and Qorvo (QRVO -7.1%), LED/RF chipmaker Cree (CREE -4.1%), and high-flying video processor developer Ambarella (AMBA -4.3%).
- Other decliners include telecom chipmakers/ARM server CPU vendors Cavium (CAVM -4.8%) and AppliedMicro (AMCC -4.4%), microcontroller vendors Atmel (ATML -3.5%), Cypress (CY -5.5%), and STMicroelectronics (STM -3.5%), voice processor developer Audience (ADNC -3.7%), analog/mixed-signal chipmakers Linear (LLTC -3.7%), Maxim (MXIM -3%), and Intersil (ISIL -3.5%), FPGA maker Lattice (LSCC -3.9%), and mixed-signal/wireless charging IC developer IDT (IDTI -5.4%).
- Chip equipment, IP, and foundry providers are also underperforming. Big decliners include ARM (ARMH -4.4%), KLA-Tencor (KLAC -4.2%), Lam Research (LRCX -5.4%), ASML (ASML -4.1%), TowerJazz (TSEM -4.3%), Mattson (MTSN -4.5%), Ultratech (UTEK -4.7%), and Tessera (TSRA -6.1%). ASML has been downgraded to Hold by Banco Santander.
- TSMC (TSM -4.6%) is among the decliners in spite of a Digitimes report stating the foundry giant's sales are expected to rise 0%-5% Q/Q in Q2 - consensus is for a 2% drop - with strong Apple A8 CPU orders offsetting soft Qualcomm Snapdragon 810 orders.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Wed, Mar. 25, 9:50 AM
Tue, Mar. 17, 6:16 PM
- Nvidia's (NASDAQ:NVDA) new Titan X flagship GPU, unveiled at the company's GPU Technology Conference, contains a whopping 12GB of GDDR5 video RAM - twice that of the prior-gen Titan/Titan Black. The number of CUDA GPU cores has been increased to 3,072 from the Titan Black's 2,880, and the core and boost clock speeds respectively hiked to 1GHz. and 1.075GHz. from 889MHz. and 980MHz.
- Not surprisingly, the Titan X is based on Nviida's Maxwell GPU architecture - Titan/Titan Black are based on the older Kepler architecture. Like its predecessors, it's priced at a steep $999, and aimed at a gaming enthusiast market that has been very good to Nvidia lately; GPU sales for gaming PCs rose 38% Y/Y in FQ4.
- Benchmarks show the Titan X soundly outperforming existing Nvidia and AMD GPUs; only dual-GPU setups manage to beat it. AnandTech: "[T]he competitive landscape right now will greatly favor NVIDIA. With AMD’s high-end having last been refreshed in 2013 and with the GM204 GTX 980 already ahead of the Radeon 290X, GTX Titan X further builds on NVIDIA’s lead."
- Nvidia has also launched Drive PX, a $10K self-driving car development platform featuring two Tegra X1 processors said to be powerful enough to "weave together data streaming in from 12 camera inputs and enable a wide range of advanced driver assistance features to run simultaneously." Elon Musk appeared on stage to praise Nvidia's efforts; the infotainment system within Tesla's Model S runs on a Tegra.
- Also: 1) Nvidia has launched Digits DevBox, a small $15K supercomputer sporting 4 Titan X GPUs and aimed at deep learning/A.I. researchers; Nvidia asserts Titan X was optimized for neural networking tasks. 2) More details have been shared about the next-gen Pascal GPU architecture (arrives next year, first detailed a year ago). It supports up to 32GB of memory, and is said to deliver much-improved floating point performance through the use of technique known as mixed-precision computing.
- Nvidia rose 1.2% today to $23.25, leaving it just $0.05 away from its 52-week high.
Fri, Mar. 13, 3:21 AM
- In the latest sign of weakening demand for personal computers, International Data Corp. predicts global shipments of PCs will decline 4.9% this year to 293.1M units, a bigger drop than its previous guidance for a 3.3% decrease.
- According to market research firm, the PC market declined 0.8% to $201B last year and is expected to drop an additional 6.9% in 2015, with smaller declines in coming years, reducing the market to $175B by 2019.
- Previously: Intel -4.1% on Q1 warning; other PC industry names also fall (Mar. 12 2015)
- Related stocks: OTC:ASIYF, AMD, HPQ, INTC, OTCPK:LNVGY, MSFT, MU, NVDA, SNE, STX, OTCPK:TOSYY, WDC
Thu, Mar. 12, 9:17 AM
- Intel (NASDAQ:INTC) now expects Q1 revenue of $12.5B-$13.1B, below prior guidance of $13.2B-$14.2B and a $13.7B consensus. Gross margin guidance remains at 60% (+/- 2%), with lower volumes offset by higher ASPs.
- "All other expectations" have been withdrawn - that presumably includes full-year guidance for mid-single digit revenue growth. Guidance will be updated during Intel's April 14 Q1 report.
- The chip giant blames the warning on "weaker than expected demand for business desktop PCs and lower than expected inventory levels across the PC supply chain." In particular, it thinks "lower than expected Windows XP* refresh in small and medium business and increasingly challenging macroeconomic and currency conditions, particularly in Europe," are taking a toll on sales. Server CPU division sales are "meeting expectations."
- Other PC-exposed names are following Intel lower: Microsoft (NASDAQ:MSFT) -2.4% premarket, AMD -2.8%, Nvidia (NASDAQ:NVDA) -2.5%, HP (NYSE:HPQ) -2.3%, Seagate (NASDAQ:STX) -2.5%, Western Digital (NASDAQ:WDC) -2.7%, Micron (NASDAQ:MU) -3.6%.
- Update (11:35AM ET): While Intel is still down over 4%, Micron and Seagate have turned positive, and HP is close to breakeven. Microsoft, Nvidia, and Western Digital have pared their losses, but remain lower.
Sat, Mar. 7, 2:17 PM
- Google (NASDAQ:GOOG) has "assembled a team of engineers to build a version of the Android operating system to power virtual-reality applications," two sources tell the WSJ. "Tens of engineers" are said to be working on the project, which was launched in the wake of Facebook's (NASDAQ:FB) $2B 2014 acquisition of early VR hardware/software leader Oculus.
- The report comes as industry investments in VR platforms accelerate rapidly. In addition to Facebook/Oculus, Sony, HTC, and multiple startups have projects in various stages of development. Sony just promised its gaming-focused Morpheus VR headset would launch in 1H16; HTC showed off its Vive headset at the Mobile World Congress.
- Last year, Google launched Cardboard, a cheap prototype kit meant to get developers to start writing VR apps for Android. Oculus, meanwhile, has partnered with Samsung to launch the Gear VR, a headset line that relies on Samsung (Android) phones to provide the device's display and camera; a full commercial launch is expected later this year. Oculus has also bought multiple startups to help maintain its tech lead.
- "Virtual reality is bigger than gaming," Oculus CTO John Carmack proclaimed at this week's Game Developers Conference (GDC). Mark Zuckerberg at the time of the Oculus deal announcement: "Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face -- just by putting on goggles ... Imagine sharing not just moments with your friends online, but entire experiences and adventures.'
- GPU leaders Nvidia (NASDAQ:NVDA) and AMD are also going after the opportunity: Nvidia used GDC to show off several VR game demos powered by its GPUs; its Maxwell GPU line has already been optimized for VR. AMD used GDC to launch LiquidVR, a VR developer SDK for its GPUs that improves head-tracking and reduces latency/stuttering, and by doing so aims to eliminate motion sickness (still a common user complaint).
Fri, Feb. 6, 3:54 PM
- After rising 16% yesterday and 48% since Jan. 20 (aided by M&A rumors and a positive Barron's piece), AMD has reversed course. Today's move comes on volume of 35.1M shares, more than twice a 3-month daily average of 17.3M. 73.1M changed hands yesterday.
- A huge short interest is likely contributing to the volatility: AMD had 132.7M shares (21% of its float) shorted as of Jan. 15.
Mon, Feb. 2, 2:17 PM
- AMD is making "real progress" in its efforts to offset declining PC CPU/GPU sales by growing sales of embedded/custom processors, declares Barron's in a positive weekend piece.
- The paper also highlights new CEO Lisa Su's cost-cutting efforts, and quotes Ascendiant Capital's Cody Acree as arguing AMD is winning back significant GPU share from Nvidia (NVDA +1.1%). Acree adds AMD has grabbed enterprise PC design win share that hasn't yet translated into revenue.
- Jon Peddie Research estimates AMD's PC GPU share fell 5.8% Y/Y in Q3 to 14.1%, and that Nvidia's share fell 1.6% to 14.1%. Intel's (NASDAQ:INTC) share is estimated to have risen 7.5% to 71.8%, thanks to rising sales of CPUs with integrated GPUs.
- Barron's does caution AMD's long-term debt load ($2.2B) now exceeds its market cap. But it also points out most of the debt doesn't mature before 2019, and that the company has $1B+ in cash/equivalents and a $400M credit facility to help pay its bills in the near-term.
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