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AMD's Hidden Strategy

Zynath Investment profile picture
Zynath Investment
1.99K Followers

Summary

  • AMD recently had a stellar earnings results and is still undervalued.
  • AMD Epyc is a more secure alternative for Cloud and Enterprise market.
  • AMD has an interesting market penetration strategy for the Vega GPU that could pay off huge.

Recently AMD (NASDAQ:AMD) reported stellar Q4 2017 earnings results. By now, many analysts and SA contributors have written many articles about the earnings dissecting every aspect of AMD's financial performance, and there's little more left to say about that. Instead in this article we are going to look at two interesting strategies that AMD is pursuing and the server market and in the graphics (GPU) market. Let's start with their server strategy.

Meltdown and Spectre Vulnerabilities

AMD's server strategy can be summed up with one word: security. Earlier this year two vulnerabilities called Spectre and Meltdown were publicized by the Google security research team. I wrote a detailed article explaining these two vulnerabilities in an article entitled: Intel And The Meltdown And Spectre Vulnerabilities Explained. If you haven't read it yet please read it for a good and hopefully easy-to-understand background into this rather complex subject.

Of these two vulnerabilities, Meltdown is by far the more serious one. Both Meltdown and Spectre allow malicious programs to read computer memory reserved for other applications, but only Meltdown allows the malicious program to break out of the hardware kernel enforced virtualization containers. This means that only Meltdown is a serious threat to the "serverless" enterprise market.

Serverless computing is the new buzzword for what basically used to be called cloud computing. In essence, both of these terms can be thought of as running your code on someone else's computer. The way this is achieved is with the use of virtual machines (VMs). A cloud computing company such as Amazon's AWS (AMZN), Microsoft's Azure (MSFT), or Alibaba's Cloud (BABA) operates a slew of very powerful servers and other companies can rent resources from those servers on hourly basis.

(Illustration of a VPS from HostSlim.eu.)

The individual hardware servers are akin to multistory apartment

This article was written by

Zynath Investment profile picture
1.99K Followers
California Licensed Attorney, Business and Information Technology consultant, and biotechnology entrepreneur. Individual investor investing in small, mid, and large cap IT and Biotech companies. Main concentration is event driven investment in option derivatives of high tech and biotech stocks. Concentration on medium time horizon of 6 to 36 months.

Analyst’s Disclosure: I am/we are long AMD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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