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AMD Short Interest At 5-Year Low

Jun. 09, 2020 8:01 PM ETAdvanced Micro Devices, Inc. (AMD)25 Comments
Bill Maurer profile picture
Bill Maurer
34.64K Followers

Summary

  • More than 10 million shares short were covered in May.
  • Number of bearish bets down more than 71% from high.
  • Shares looking to hit new high.

It has been three months since I covered how short interest in chipmaker Advanced Micro Devices (NASDAQ:AMD) came down a bit in the second half of February. Investors have certainly come a long way on this name from when it traded below $2 a share back in 2015, but it took a while for the number of bets against the name to top out in 2018. Recently, global markets have rallied back from their coronavirus lows, and the latest update on short interest for AMD shows a new 5-year low.

It was just over two years ago when more than 192.6 million shares were short this stock. It was late last year when this number got back under 100 million shares for the first time in nearly three years. After a small tick-up in short interest through the middle of April as markets were under pressure, we've seen the downward trend continue again as seen in the chart below.

(Source: NASDAQ AMD short interest page)

I didn't cover the prior two NASDAQ updates because they didn't really change things in a big way. However, the back half of May saw a decline of more than 6.5 million shares, putting total short interest at 55.2 million shares. If you think about "handles" in the terms of tens of millions, this is the first time we've seen a 5 handle since I started tracking this key metric for AMD. Since my last update on short interest, I had to change the y-axis on the chart to get below the 60 million level.

Two years ago, we were talking about the bitcoin bubble. Since then, AMD's first quarter GAAP profit has doubled. Back then, AMD had a net debt position of $343 million. While there has been a bit of dilution since, the company has greatly improved its balance sheet. Most debt

This article was written by

Bill Maurer profile picture
34.64K Followers
I am a market enthusiast and part-time trader. I started writing for Seeking Alpha in 2011, and it has been a tremendous opportunity and learning experience. I have been interested in the markets since elementary school, and hope to pursue a career in the investment management industry. I have been active in the markets for several years, and am primarily focused on long/short equities. I hold a Bachelor of Science Degree from Lehigh University, where I double majored in Finance and Accounting, with a minor in History. My major track focused on Investments and Financial Analysis. While at Lehigh, I was the Head Portfolio Manager of the Investment Management Group, a student group that manages three portfolios, one long/short and two long only. I have had two internships, one a summer internship at a large bank, and another helping to manage the Lehigh University Endowment for nearly a year. Disclaimer: Bill reminds investors to always do their own due diligence on any investment, and to consult their own financial adviser or representative when necessary. Any material provided is intended as general information only, and should not be considered or relied upon as a formal investment recommendation.

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Comments (25)

ProfessorSmatt profile picture
I warned you all again! If you can’t follow the signs or can’t detach yourself from an investment you will lose money. I said shot this and it hit $59 you could have made money up and now back down!

Buy back range $48-52
Mr Investor profile picture
The continuing supportive Fed means green light for investors to keep pushing the stk mkt higher. Seems highly likely now that AMD will soon move into the $60's, IMO.
ProfessorSmatt profile picture
Told you all to short it if you did you would be up $1.30 + if it heads back to $50
Sighcopath profile picture
@ProfessorSmatt I wrote the $60 covered calls that expire Friday this morning. May be buying them back at half the price tomorrow morning!
Chris Lau profile picture
AMD's already returned 25x since I first pitched it to followers. It will keep rewarding investors because of the console release later this year, Ryzen 4000 on mobile, and epyc. Weak quarterly pc sales will create another leg down so buy more then. Find another triple* while waiting.

* https://bit.ly/37fNftn
puddnhead profile picture
OMG you've become just like Hibben
wow&wow profile picture
"AMD's already returned 25x since I first pitched it to followers."

The phase of making "big $" by anticipating (with RISK) AMD coming up with truly competitive products is over, but I will keep those shares long, since it surely have a bright future and I am too slow to tango with the market fluctuations, and am waiting for accumulating more when a correction happens.

AMD now has truly competitive products but needs competitive BUYING from (i.e. competitive SELLING to) OEMs and enterprises.

AMD's challenge is now to have successes in selling to enterprises (not just big data centers) and OEMs (in addition to DIY).
c
I'm long and would rather to have a higher short interest.
f
Why we had 6.5% up tick today's session?
r
The reason was that
New NVIDIA DGX A100 will use 2nd Generation AMD EPYC Processor. That is a great news for AMD shareholders. 🎉🎊🍭🎈🍷
R
That news was already widely known in the tech press a few weeks ago
Sighcopath profile picture
@sailorbob74133 It was rumored in the tech press. AMD made it official with a press release just a few days ago. Usually the market "buys on the rumor and sells on the fact". This is tech where there are so many rumors you would go broke buying on them all!!
f
I knew it.
I has been a short squeeze after another.
for about a year (of wild ride).
Hope to have steady stock price for AMD.
Sighcopath profile picture
AMD will be powering the NVDA A100 AI servers. This is going to drive AMD to new all time highs. NVDA stock has already increased on the expected revenue from the new AI GPU. With NVDA using AMD CPU instead of an ARM or INTC CPU this should help AMD get the "double digit server CPU share" that has been expected. Had projected AMD to trade between $48 and $58 for the next 4 months. Now I am going to have to reevaluate the trading range UPWARD. Next two weeks should indicate just how much higher? $60 $65 or even $70, depending on how well the new servers with the AMD CPU and NVDA GPU start selling. The bottom has definatly moved up from $48 to $52!
R
this is a Halo product win, but I don't know how big of a difference it will make to AMD financially. Each server costs $200,000 and contains 2 64 core epic chips. even if Nvidia sells ten thousand of these servers that will only result in about a hundred and fifty million in revenue for AMD assuming retail epic pricing.
Sighcopath profile picture
@sailorbob74133 The $200,000 servers 'legitimize" the AMD server CPU. You can't buy this type of 'advertising". If the AMD CPU works so well that NVDA is using (teaming up with) the hated AMD CPU company, then how soon before the AMD GPU company starts to get the same respect? How much closer is AMD too releasing the $150,000 server with the AMD CPU/GPU?
R
@Sighcopath You can't buy advertising like that. But it'll be a while before we see AMD CPU/GPU servers like that. AMD is still playing catch up in the GPU market and by all accounts even with RDNA2 making %50 perf/watt improvements over RDNA1 Nvidia's new Ampere is still going to eek out a win at the very tippy top of the high end, but the gap is definitely narrowing by quite a bit. Give it another 12 months and AMD might catch Nvidia also...
P
So exiting to own this stock! In my computer store, I keep 15 AMD Ryzen chips in stock (uses up fast) vs 3 Intel chips. Laptops in stock are half AMD and half Intel, Intel sells better. The server EPYC market share will be shooting up. Gross margin climbing, EPS will drive stock prices. Fun time yet to come.
dieuwer profile picture
After the previous short-interest low in August of 2016, AMD rocketed up more than 200%.
ProfessorSmatt profile picture
Time to short it then!
b
Do it. I dare you.
Vitamanrocks1 profile picture
Good luck lol
ProfessorSmatt profile picture
Ooooh I triple dog dare you! Ok I will ... it’s a dang cycle nonstop. Up to $57-59 back to $48. One day you will get your head out of your way and see this!

Nobody said AMD was bad but staying married to a stock is dumb!
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