$AMD - Good Price or Good Company ? Better Than $INTC ?
My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ?
"Why not both" I asked myself ?
Wouldn't there be more upsides comparatively speaking ?
Having put the theory to test on (1) social media company, (2) credit cards companies, (3) EV company, (4) entertainment company (5) technology companies and (6) financial institutions; time to try it on a semiconductor company.
Gonna put $Advanced Micro Devices(AMD)$ to the test & see if it fits the bill.
Sidetrack: Below are stocks that I have covered. Interested ? Click to read. Please "Like" to show some love okie ? Thanks !
- Snap Inc
- General Motors
- Visa Inc .
- Tesla.
- Netflix .
- Mastercard .
- Intel .
- Microsoft.
- JP Morgan .
- Morgan Stanley .
- An American multi-national semiconductor company.
- Founded in 01May 1969 (its a 53 years old legacy)
- Founder was Jerry Sanders and a group of other technology professionals.
- Its initial offerings were primarily memory chips & other components for computers.
- It expanded its product range by venturing into microprocessor market, competing with $Intel(INTC)$, its main rival.
- On 15 Oct 1979. it listed on the New York Stock Exchange (NYSE)
- Its initial collaboration and subsequent rivalry with $Intel(INTC)$ could be traced to the fact that both founders were ex-colleagues at Fairchild Semiconductor.
In 2022, a year where US market has been hammered by extreme volatility and ease of covid pandemic restrictions - how did AMD Inc fare ?
Current stock price < 02 Feb 2022 stock price by -31%. Hmm....
AMD - Summary
- Total revenue came in at $5.6 Billion vs $4.82 Billion (Q4 2021); thats +16.18% gain
- Net income (GAAP) came in at $21 Million vs $974 Million (Q4 2021); thats a -97.8% loss
- Earnings per share (GAAP) was $0.01 vs $$0.80 (Q4 2021); thats a -98.75% loss.
- Earnings per share (non GAAP) was $0.69 vs $0.92 (Q4 2021); thats a -25% loss.
AMD - Revenue breakdown by Key Business Segments
- The 4 main key businesses contribute almost equal share towards Total Revenue
- For Year 2022, both Clients and Gaming registered negative growth of -51% & -7% respectively. Refer to above diagram on declines' justifications.
- This have been buffered by Data Centre and Embedded respective growth of +42% & > +100% respectively. Refer to above diagram on gains insights.
AMD - Other highlights
- In 2022, AMD like other US companies; operating expenses have inflated without salient reasons (eg. Visa : +25% to $2.8 Billion, Tesla : +16% to $1.87 Billion).
- There is a need to bring down expenses in the face of a still challenging 2023 market environment.
AMD's CEO on Q4 2022 Results
We accelerated our data centre momentum and closed our strategic acquisition of Xilinx, significantly diversifying our business and strengthening our financial model. Although the demand environment is mixed, we are confident in our ability to gain market share in 2023 and deliver long-term growth based on our differentiated product portfolios... AMD, CEO, Dr Lisa Su....
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Is AMD - Both A Good Price and Good Company ?
- Being a major player in the semiconductor industry means it will be subjected to the demand cycles "common" in this industry.
- In the midst of the current lull period, AMD will continue to push forward in its core pillar products so that when demand returns, they are ready for the next demand lap. Refer to below diagram on details.
- Similarly, AMD will continue to commit to ESG implementation & governance while pushing forward its purpose driven, high performance & adaptive computing persues. Refer to below diagram for details.
History Between INTC & AMD :
Intel vs AMD - share price from 1990 to 2010
- The intense rivalry between the 2 major semiconductor companies are legendary or as it had been drummed up by the media
- All thru the 90s into the early 20s, Intel seemed to be a stronger player especially with its 80x86 microprocessor.
- However things have turned around for AMD right around 2014 with the onboarding of Dr Lisa Su as the new CEO.
- AMD's stock has soared more than 25-fold under her helm, propelling it to a $110 Billion market capitalization as of early Jul 2021.
Apple To Apple Comparison
Intel & AMD - Jan 2023 stock price movement
- Above is the both stocks' price movement for Jan 2023
- In terms of Quarterly performance, AMD had fared better than Intel
- In terms of stock prices, Intel's value is one third of AMD ?
- Do you think AMD is both a good price and good company ?
- With the 0.25% interest hike confirmed, do you think Semiconductor stocks will rally from today onwards ?
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On a related note, watch out for share dilution - AMD have done a lot of that in the past few years. If the company gets 10% bigger but issues 20% new shares then your existing shares actually lose value.
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