[HN Gopher] AMD is now worth more than Intel
___________________________________________________________________
AMD is now worth more than Intel
Author : clove
Score : 129 points
Date : 2022-03-05 18:15 UTC (4 hours ago)
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(TXT) w3m dump (seekingalpha.com)
| esistgut wrote:
| This may be a naive tough but the unfolding of the ukranian
| events had me wondering again and again if more attention should
| be used when buying items coming from China and TSMC. The rise of
| the Ryzen CPUs had me switch to AMD from Intel after many years.
| Next time I could actually prefer the worst CPU as long as it is
| built in the west. Is this an oversemplification? Am I wrong?
| Anyone here share similar toughts?
| threatripper wrote:
| If country A depends on the products of country B and vice
| versa, then a war between A and B may be ill advised.
| Untangling your supply chain is a prerequisite for successful
| war.
|
| To add to that: If country A depends on products of country B,
| then country C could want to attack country B to hurt country
| A.
| panda88888 wrote:
| TSMC is actually a Taiwanese company and its most advanced fabs
| are in Taiwan, a democratic country (more or less, with its own
| passport, military, government, etc) that is not under the
| control of China.
| systemBuilder wrote:
| Up until now AMD has benefitted from a great deal of animosity
| towards Intel by absolutely everyone in Silicon Valley including
| Google Facebook and Apple. It didn't take much to realize that if
| you were building a laptop or building a data center intel was
| ripping you off. I know my employer (Google search) felt this
| way!
|
| From Haswell (4000-series) to the 12000 series I would say there
| was maybe one generation of improvement in between and six
| marketing generations where nothing got better nothing got faster
| but prices were outrageous -$600 for a slow hot MacBook cpu, and
| everything got new marketing names!
|
| So the industry has been desperate for an alternative to Intel
| since 2009 and AMD has finally delivered on the promise by
| building data center chips and adapting them to laptop use. I was
| an early AMD investor because of rx480 at $3.50 by the way but I
| sold out at $10.50.
|
| From here on AMD will truly have to earn its keep and things will
| be a lot tougher as they are no longer the scrappy underdog
| anymore!
| gnicholas wrote:
| How much of this is due to Apple's shift away from Intel chips?
| AtlasBarfed wrote:
| Do you mean the revenue loss of Apple's business, or Apple
| showing ARM is so capable in desktop and auguring the end of
| x86 dominance in server/desktop?
|
| In five years or so (ok maybe 7 or 8) Intel turned a two year
| lead in fab technology to being behind by two years, so there's
| that too.
|
| Utter inability to break into the mobile market, ARM or
| otherwise.
|
| Failed attempts at discrete graphics and not having something
| ready for the rise of crypto/AI.
|
| XPoint was basically a failuer, SSD dominance taken from them.
|
| It shows both an empty cupboard of in house talent and
| technology and a zombie management structure.
| trevortheblack wrote:
| Very little.
|
| Correlation. Not causation.
|
| Apple shied away form Intel due to their failure at landing
| mobile chips.
|
| Intel failed at mobile due to their (then) sales-focused
| (rather than engineer-focused) regimen.
|
| Source: I worked at intel on the Mac chips for a year and a
| half
| causality0 wrote:
| Yeah. Just look at the performance per dollar ratio on mobile
| Intel chips right around Cherry Trail. Bay Trail and Cherry
| Trail lines were very good deals, and then core-m threw all
| that right out the window.
| jlmorton wrote:
| Very little is due to Apple's shift away from Intel chips on
| Mac, but an enormous amount is due to Apple's shift to TSMC-
| manufactured Apple Silicon on iPhone.
|
| iPhone is largely what created the sustained, predictable
| volumes for high-end chips that has allowed TSMC flourish, and
| TSMC is what has allowed AMD's strategy to take flight.
|
| If AMD was stuck with GlobalFoundry, they would be nowhere.
| andrewmcwatters wrote:
| No, it really isn't. A brief DCF analysis shows AMD is heavily
| overpriced. There is a significant difference between tech sector
| sentiment and earnings yield. See also: Facebook.
|
| DCF using ^TNX as discount rate: $70.93, with a 50% discount:
| $35.465. Current price as of Mar 5, 2022: $108.41.
| Jensson wrote:
| The stock market is usually correct about companies, you need
| to have a really good explanation for why it is wrong. Lots of
| people thought that Facebook or Google etc were overvalued.
| They weren't, even if you account for the low probability of
| them taking the market the combined valuation of every similar
| company together shows they weren't overvalued.
| andrewmcwatters wrote:
| Yes, and those explanations are based on valuation
| strategies: discounted cash flow being the most generous,
| though also perhaps more "accurate" than other methods
| despite being very sensitive to changes in discount rates
| with historically low interest rates.
|
| If you did discounted cash flow analysis on Facebook or
| Google, you'd find that despite their high price to earnings
| ratios, their earnings produced fair valuations, not
| overvalued ones.
| danielmarkbruce wrote:
| No, they aren't. The explanations are based on different
| estimates of cashflows. As a concrete example - people
| didn't miss GOOG when it went public because of "valuation
| methods". People missed it because they didn't imagine that
| in 2022 a search engine company would be doing $75 bill a
| qtr of high margin revenue. People didn't miss AAPL in the
| late 90s because of "valuation methods", they missed it
| because they didn't see AAPL doing $90 bill a qtr of pretty
| high margin revenue.
|
| Understanding the future cashflows of a business is really
| difficult stuff. Playing with numbers in a spreadsheet is
| really easy stuff.
| andrewmcwatters wrote:
| I enjoy the definition of investing as an act of thorough
| analysis promising safety of principal and an adequate
| return, and all other behaviors otherwise bring
| speculative.
|
| If you're paying $42.14 per dollar of earnings there is a
| likelihood that more often than not you're overpaying.
|
| If you can't pass simple mechanical litmus tests you'd
| better be damn sure, and frankly there just aren't many
| exceptional companies where I feel damn sure about them.
| danielmarkbruce wrote:
| Thorough analysis isn't what you are doing, it's
| simplistic analysis. That's the very problem with it. It
| sounds like you are dying for the Ben Graham era - when
| simplistic analysis based on financial statements was all
| that is required because the competition in investing
| was... not much. It's a very different game now, and you
| actually have to have deep insight into the companies and
| the industries they are in.
|
| You can't just do a simplistic extrapolation of the last
| couple years in a spreadsheet.
|
| Google couldn't pass your "simple mechanical litmus
| tests" when it went public. Apple couldn't pass it in the
| late 90s. Amazon couldn't pass it most of it's life. IBM
| could for a good number of years (just look at the
| numbers when Buffett was buying it...) Most of the banks
| could in 2005/6/7.
| systemBuilder wrote:
| Exactly true the rise in the cost of next-generation fabs
| has completely changed the business model so that only
| foundries can survive. Benjamin Graham analysis is not
| capable of detecting this inflection point in industry
| strategy nor can it detect Intel's stubborn refusal to
| adapt and change!
| danielmarkbruce wrote:
| Yup. And by all reports Ben Graham was a brilliant dude.
| If he were in the game today, I doubt he'd be playing the
| way he played back in the day. He'd get in there and
| figure it out.
| andrewmcwatters wrote:
| The mathematics of investing haven't changed, but if you
| have some literature to suggest otherwise, I'd be very
| interested in reading it.
|
| You seem to think that I use these mechanical estimates
| as the primary method for purchase, but they are not.
|
| I'm not sure what your point is about IPOs: they're
| historically a terrible time to invest, which is common
| knowledge.
|
| And actually all of the companies you have mentioned have
| easily passed such litmus tests over their life time.
| Sometimes they're overbought, some times they're
| oversold.
| danielmarkbruce wrote:
| The math hasn't changed - the competition has. All the
| insanely obvious stuff is gone. You need real insight.
|
| I didn't make a point about IPOs. I made a point about
| companies where real insight was required
| danielmarkbruce wrote:
| I don't understand why you are getting downvoted. This
| statement that the market is usually correct is basically
| right. Maybe a better explanation is: something like 90% of
| the time 90% of companies are priced within 10% of the "true"
| valuation.
| cudgy wrote:
| > stock market is usually correct about companies
|
| Correct about what? What people are willing to pay for the
| company at that point in time? Sure. What the value of
| discounted cash flows generated by a company over a span of
| years? Definitely not.
| wowokay wrote:
| Like it was with GME?
| mgh2 wrote:
| Exactly, media controls the narrative and people en masse
| are gullible to manipulations. The stock market in the
| short term is at best a perception, perhaps only on the
| long term reflects a normalized, economic reality
| ethbr0 wrote:
| GME is the way it was because it is, effectively, not an
| open market of buyers and sellers, due to deliberate (if
| decentralized) manipulation. This is in contrast to the
| vast majority of other securities.
| x3sphere wrote:
| Interesting that you mention FB, considering it's just had a
| 40%+ drop over a matter of weeks. Compared to other FAANG,
| the drop is massive. FB is now only up around 30% compared to
| early 2017. If you'd bought GOOG or AMZN during the same
| time, you'd be up over 200%.
|
| What warrants such a huge drop if the market was correct
| about FB? Seems to me like it was indeed overvalued, but the
| market just came to that realization a few months ago. Even
| though we're experiencing a broad selloff in the market FB
| has been hit way harder than comparable companies.
| AtlasBarfed wrote:
| Pets.com
| danielmarkbruce wrote:
| If it's this easy, go start a hedge fund. You are literally
| leaving billions of dollars on the table by not.
|
| An average first year finance student can do a "brief DCF
| analysis". They put garbage in for the cashflows and get
| garbage out for the valuation - and then write it up with high
| precision.
| adenozine wrote:
| Not the person you're replying to, but I just wanted to point
| out:
|
| andrewmcwatters.com boasts a $1400/day rate. That's not
| billions, but is still quite a respectable rate for their
| services. I assume they're well respected and trusted by
| their clients.
|
| Hoever, in your comment here, you've mistaken some napkin
| math for a hard and fast assertion on their part and I think
| it's a little unfair. There's far more to a company's
| existence than DCF, all the poster did was point that out.
| It's obviously not that easy to run a hedge fund, but that's
| no excuse for sloppy facts here, or anywhere else for that
| matter.
| CyberDildonics wrote:
| They can make more than that if they can predict the
| future, but there's a big difference between predicting the
| future and selling the future.
| danielmarkbruce wrote:
| It's not the napkin math which is the issue - it's stating
| it as though earnings are an obviously known, agreed upon
| quantity.
|
| Napkin math of "I think they can sell x units at y margin
| with z fixed costs because of a, b and c, and I think that
| will grow at g because of whatever and my back of the
| envelope says that is worth $" would be great. Ie, real
| insight. Low precision, high accuracy insight with napkin
| math would have been wonderful.
| matthewaveryusa wrote:
| As a counter-point AMD as a datacenter chip provider grew
| 100% last year and investors like myself view it as a
| catalyst of growth that begets more growth. More simply
| put: they are getting their foot in lots of doors. it's
| stupendously difficult to valuate that just looking at the
| financials. AMDs renewed brand recognition also allows it
| to trade at better multiples
| drexlspivey wrote:
| AMD is expecting another 40-45% growth this year (it grew
| almost 50% in 2021) while Intel is expecting 2%-3%. Did you
| factor that in the brief DCF?
| mdasen wrote:
| Where are you seeing 40-50% growth for 2022? I'm seeing AMD
| projecting a 31% increase for 2022 over 2021 ($21.5B in sales
| vs. $16.4B in 2021 (https://www.cnbc.com/2022/02/01/amd-
| earnings-q4-2021.html,
| https://www.tomshardware.com/news/amd-2022-sales-to-
| hit-21-5...). It looks like the "it grew almost 50% in 2021"
| is also underselling their 2021 a bit. That was their Q4
| revenue growth year-over-year, but 2021 revenue was up 68%
| over 2020.
|
| I think the issue is that AMD's growth seems like it might
| hit significant headway. Samsung is having issues with their
| fabrication. We'd seen articles about AMD and Qualcomm
| wanting to move a lot of their chips to Samsung because TSMC
| was seen as too much of an Apple shop to their detriment.
| We've seen articles in the past month noting that Qualcomm is
| moving things back to TSMC from Samsung because Samsung's
| yields are so bad. The point here isn't that the sky is
| falling or anything, but that AMD does face some
| manufacturing constraints.
|
| We've seen reports that Intel has secured a large amount of
| TSMC's 3nm production and it's safe to assume Apple has as
| well. Qualcomm will also be competing for fab space. In that
| environment, will AMD be able to keep pushing its advantages?
|
| AMD has done great stuff over the past few years. Some of
| that has been helped by Intel's fab mishaps and TSMC's
| wonderful advances. That's not to downplay the many other
| things they've worked hard on. Many companies get openings
| and never take advantage of them. However, I think it's
| important to note that the opening is likely going to be
| narrowing.
|
| If Intel is able to keep AMD away from TSMC's 3nm fabrication
| long enough for Intel's own fabs to get back to being
| competitive, what does that mean for AMD? Let's say that
| Intel 3 launches in mid/late 2023 and it's truly equal to
| TSMC 3nm. Let's say that Intel keeps AMD away from TSMC 3nm
| until 2024. What does that do to AMD's growth?
|
| AMD is looking to launch TSMC 5nm Zen 4 processors in the
| second half of 2022. We've seen reports that TSMC is going to
| be making 3nm Intel hardware from July 2022. Do we see AMD
| 5nm processors in September and 3nm Intel processors in
| December?
|
| Again, I don't want to take anything away from the wonderful
| work AMD has done. At the same time, I think most people
| would likely agree that with equivalent fabrication, Intel is
| as good as AMD if not better. If Intel is able to launch 3nm
| and box AMD out of 3nm for a while, that can offer Intel a
| while to leapfrog AMD on process - and possibly enough time
| to make sure that Intel's fabs get back in the game.
|
| Yes, AMD had great growth in 2021 and they'll have some great
| growth in 2022. 2023? It seems like Intel might leapfrog AMD
| there.
|
| Again, the sky isn't falling and I believe that AMD will have
| a lot of success in the future. It's more that it seems like
| AMD's growth will get stymied by Intel's use of TSMC and
| Intel's own fabs catching up. The idea behind AMD's current
| valuation is that they will become as big as Intel and even a
| lot bigger over the next several years. However, even with
| amazing growth in 2022, they won't become as big as Intel. In
| 2023, it seems like a lot of AMD's advantages turn into Intel
| advantages as Intel launches on TSMC's 3nm process. 2023
| seems like it'll be a great growth year for Intel - at the
| expense of AMD's growth. I think AMD is in a strong position
| to continue being a great company with great products. I just
| think their growth slows as Intel fixes its problems. Of
| course, this all assumes that Intel fixes its problems.
| simpsond wrote:
| Intel fab blocking AMD may impact AMD but it will impact
| Intel's margins. I really hope Intel gets back on track
| with EUV, but 10nm was a major blunder and setback. TSM has
| the leading edge monopoly right now. There is a chance it
| stays that way beyond 2023.
|
| FWIW: I want competition for the sake of progress, but I am
| bullish AMD for the next few years, and may be bullish
| Intel once they demonstrate their ability to shrink their
| process and execute IDM 2. Then they compete with AMD
| again... and TSM.
| colinmhayes wrote:
| Intel's profit is $20 billion. They can afford to shave
| margins for a few years in order to block AMD and regain
| relevance.
| systemBuilder wrote:
| It was projected and widely broadcast throughout the
| industry 12 years ago that fabs were getting more
| expensive faster than any single design domain for
| semiconductors was growing! So the only way to build next
| generation fabs was to onboard new types of designs to
| offset the cost of the fabs which was doubling every two
| or three years!
|
| Intel had the greedy stupid arrogant policy of going it
| alone for everything, and failed to onboard cellular
| (3x!) and AI and flash and tv and the list goes on and on
| and on .... Hence they wasted more than 10 years without
| onboarding a single new type of semiconductor into the
| Intel Fab production process! It doesn't matter if they
| designed the best chips in the Universe they can't keep
| up if they can't build the next generation Fab and they
| can't do it with CPUs alone so at the moment they are
| facing total financial destruction of in house CPU
| production!
|
| Taiwan Semiconductor had the wonderful intelligent smart
| idea to crowdsource designs from all over the planet and
| of course that open market for foundry services is the
| only way forward and Intel was a fool for a decade at
| least! It's still not clear they can mend their ways!
|
| Unless Intel proves it can succeed as a foundry, they're
| doomed - or will lose their fabs! It's not an easy
| transition to make for such a large company!
|
| You seem to think it's a minor thing for Intel to pick
| itself up and start driving again. No. False. The other
| competitors have boarded jet airplanes (foundry model
| with much greater economies of scale) whereas intel still
| thinks it can compete in the cars (in-house fabs) of 50Y
| ago ..
| [deleted]
| 01100011 wrote:
| 40% growth when heading into a period of massive energy and
| food inflation along with a cessation of monetary stimulus? I
| think AMD may be a bit optimistic and isn't factoring in
| overall macro trends.
| lucianbr wrote:
| Still a lot better than Intel with 2% growth "when heading
| into a period of massive energy and food inflation along
| with a cessation of monetary stimulus".
| monocasa wrote:
| That growth comes from greatly expanding into the
| datacenter space which has the stored capital necessary to
| make good on that.
| mhh__ wrote:
| That growth is only really because they fucked up so badly
| prior to Zen, Intel still make a lot more money than AMD so
| for them to be considered less valuable than AMD would have
| to be factoring huge amounts of undeterred growth i.e. intel
| continuing to fuck up, which I just don't think will happen.
|
| Along with Tesla, AMD is a "won't go down but probably won't
| recover fully after a big crash" type of valuation.
| jeffbee wrote:
| Your regular reminder that anyone can post on Seeking Alpha.
| andrewmcwatters wrote:
| Anyone can write poor articles on securities valuations,
| period.
| mgh2 wrote:
| Maybe this is stock pumping: announced not long ago, perhaps
| analysts think that repeated exposure will excite the bulls
| https://news.ycombinator.com/item?id=30454707
| clove wrote:
| AMD just surpassed Intel in its market cap for the first time
| in history. It's an inflection point in the AMD-Intel
| rivalry, and many people noticed.
| shoo wrote:
| If you have the time, please share a bit more detail about the
| modelling approach + assumptions used for the DCF. I'd find
| that pretty interesting and suspect others would also.
|
| Whenever I've tried to run my own DCF analyses, I've found some
| parameters and modelling assumptions have a major impact on the
| resulting estimate. Discount rate parameter is one. The model
| and assumptions used to estimate revenue and operating/net
| profit when extrapolating 5 - 10 - 20 years into the future
| also make a large impact.
|
| Suppose in our DCF analysis we aspire to forecast company
| performance over a 25 year time horizon and then discount the
| profits back to some NPV. Then we need some way of
| extrapolating the company's revenue for the next 25 years. One
| way to do this could be to put together some kind causal model
| where we identify the major factors that contribute toward
| generating revenue -- maybe this could break down revenue by
| segment or major product line, and attempt to predict supply,
| demand, price points, production capacity etc for each product
| line, using knowledge of how the industry works. Then we'd have
| to figure out how to forecast all of those drivers of revenue,
| e.g. forecasting the capex used to build new plant to increase
| capacity & so on. Another way could be to ignore trying to
| build a semi-plausible generative model for revenue and instead
| just do some kind of simple empirical model only -- e.g. fit a
| regression model to the trailing 5 years of historical revenue
| numbers or annual revenue growth rates combined with some kind
| of prior to force revenue growth to decay toward something
| unobjectionable the further into the future we project.
|
| I've got some code that automates calculating a DCF. I've
| adopted some form of the latter approach to forecasting revenue
| -- fit a simple empirical statistical model to historical
| revenue -- it isn't very intellectually satisfying as it
| doesn't incorporate any real world knowledge about the causes
| of revenue in specific industries or companies. So, many
| forecasts of revenue generated by this approach will be quite
| wrong, leading to quite misleading DCF estimates. But on the
| other hand, I can run my kind of dumb DCF analysis in a
| completely automated way using inputs that are reported in
| company financials in a standard format, which is much quicker
| and easier.
|
| When i run my crude DCF analysis over INTC and AMD -- using a
| somewhat arbitrary 6% discount rate -- I get the estimates
|
| INTC -- priced by mr market at $48.07 / share
| quantile 0.2 $87 / share quantile 0.5 $140 / share
| quantile 0.8 $196 / share
|
| AMD -- priced by mr market at $108.41 / share
| quantile 0.2 $42 / share quantile 0.5 $77 / share
| quantile 0.8 $121 / share
|
| the "quantiles" are different scenarios of assumed future
| revenue growth trajectories. quantile 0.2 assumes relatively
| poor revenue growth. quantile 0.8 assumes relatively great
| revenue growth. quantile 0.50 is some kind of midline.
|
| market valuation for AMD is either based on something that
| isn't discounted future earnings, or market's forecast for how
| future earnings will evolve is very different to my crude
| backward-looking model.
| andrewmcwatters wrote:
| I use the most recent 5-10 years of earnings, assuming there
| isn't significant deviation therein. Line of best fit. Adjust
| for modest inflation. I haven't read any literature that
| suggests a better method, but would be inclined to discuss
| such techniques.
|
| I use the 10-year Treasury note as a risk-free rate, which
| results in a share price much too high due to historically
| low interest rates. I do not have a reasonable risk premium
| that I otherwise use, as I have not yet found a sensible
| contemporary measure of such a premium. I do know that
| investing with a desired 10% real return is a relevant
| figure, but I don't have many other data points on that. As a
| result, I use a 50% discount from the resulting price to
| provide a margin of safety.
|
| These are all roughly textbook constants that I use to serve
| as some mechanical "suggested basis [for] maximum appraisal
| for investment."
|
| I also perform these in an automated way with publicly
| available SEC data... I don't believe that it is supposed to
| be intellectually stimulating. I think it's boring, and I'm
| fine with that. There is no simple mechanical process that
| will allow one to appropriately incorporate trade information
| and adjust valuations as a result. You don't know until you
| see the reports. And most of the time, not really even then.
| I don't know what the BOM is for plenty of products. I don't
| need to research that.
|
| I don't enjoy analyzing companies that have too much at stake
| to produce their net earnings; even companies I personally
| enjoy I have a hard time convincing myself even with a fair
| value estimate that I'd like to own its common stock.
|
| I do appreciate your reply, though. I'm more interested in
| these discussions than ones simply claiming how supposedly
| great or immoral or how much potential a company has. If I
| want opinions to fuel speculative theories, I can go to
| Twitter.
| xwdv wrote:
| I hope no one truly listens to this guy. He's a number cruncher
| who thinks running calculations is all you need to invest.
| Listen to people who actually understand the market and how to
| profit from its sentiments, not math. The only "glory" these
| guys ever see is when stuff crashes and they say "I told you
| so". Who wants that???
| clove wrote:
| It's not worth more because one valuation method puts the stock
| as overpriced? I don't follow your logic.
| andrewmcwatters wrote:
| If you use other valuation methods, it is even more
| pronounced.
| fuckcensorship wrote:
| Such as? What about valuation methods that show the
| opposite conclusion? Why are these methods less accurate
| than the ones you've chosen?
| clove wrote:
| Like what? Option pricing? Show me how option pricing puts
| AMD at overvalued. Pardon my French, but I think you're
| talking out your ass.
| andrewmcwatters wrote:
| No one who is investing cares about option pricing.
| danielmarkbruce wrote:
| "valuation methods" are trivially easy to use. It's
| figuring the inputs that are rocket science.
| whack wrote:
| This seems to be heavily driven by the difference in their PE
| ratios. Intel's PE ratio is ~10, and AMD's is ~40.
|
| For context, AMD's quarterly revenue is ~5B and Intel's is ~$20B.
|
| AMD's quarterly net income is ~$1B and Intel's is ~$4.5B.
|
| I'm surprised that AMD is valued higher, despite their revenue
| and profits being so much smaller. The financial markets are in
| essence betting that AMD will be able to achieve revenue/profit
| parity with Intel, despite the huge lead Intel currently has. It
| will be very interesting to see if that comes to pass.
|
| I remember the days when AMD seemed to be on the verge of
| bankruptcy, and there was talk of Intel simply buying AMD since
| it was so cheap. Presumably that didn't happen because Intel
| feared anti-trust laws if it purchased its main/only competitor.
| Kudos to AMD for the turnaround - this competition is sure to be
| benefit the wider industry.
| cinntaile wrote:
| People keep forgetting that AMD is fabless, while Intel is not.
| You can't just compare their numbers without taking this
| important difference into consideration.
| colinmhayes wrote:
| I really don't buy being fabless as an advantage for amd. It
| just means they're at the mercy of TSMC and maybe samsung.
| Especially with apple and it looks like Intel getting into
| the fabless design game it really just seems like the fabs
| will be able to squeeze all the profit out.
| whack wrote:
| Stock valuations are driven primarily by present and future
| profits. Given that their profits are primarily coming from
| extremely similar markets, you absolutely can and should
| compare their numbers, especially their earnings.
| cinntaile wrote:
| I don't see how this disagrees with what I said. If you
| have huge capital expenses because you have your own fabs
| this will have implications for your future profit
| potential.
| omegalulw wrote:
| Financial markets almost always tend to price future growth in,
| it's not really a surprise.
| 01100011 wrote:
| If China moves on Taiwan AMD will go to nearly zero. If you're
| invested in AMD, either via equities or employment, make sure to
| hedge your position.
|
| Edit: Curious if the downvotes are because you think AMD doesn't
| need TSMC, because you think China will absolutely never invade
| Taiwan, or if you think AMD can find another fab within a year or
| two.
| clove wrote:
| I didn't downvote you, but
|
| (1) TSMC is building fabs in both the US (Arizona) and Japan
| (Kumamoto). (2) China is unlikely to invade Taiwan anytime
| soon; the country is working on more of a diplomatic takeover a
| la Hong Kong. (3) I don't know any reasonable argument for AMD
| not needing TSMC.
| systemBuilder wrote:
| Not exactly true AMD is still doing a little bit of
| manufacturing at Global Foundries but that place threw up their
| hands in the air and quit innovating! So stuck at 10-12nm ...
| amelius wrote:
| After recent events, that will not happen.
| vkou wrote:
| Sanctioning Russia is easy for the West. Sanctioning China is
| a non-starter.
| exdsq wrote:
| Maybe, but Taiwan has a treaty with the US and other
| countries meaning it'd escalate out of the gate. Ukraine,
| sadly, had none.
| jlmorton wrote:
| Taiwan does not have any treaties with the United States,
| because the United States does not recognize Taiwan as a
| country, or have normal diplomatic relations with Taiwan,
| ever since the Taiwan Relations Act of 1979.
|
| The US _did_ have a mutual defense treaty with Taiwan,
| but it was terminated by the Taiwan Relations Act after
| the US initiated diplomatic relations with the People's
| Republic of China on Jan 1st, 1979.
| [deleted]
| badrabbit wrote:
| Disagree. War with China is worse than sanctioning China.
| Abandoning Taiwan means deatabilizing the region (Japan
| militarizes, China opposes Japan. NK does whatever they
| want. South china see conflict leads to vietnam,philipines
| joining,etc...).
|
| China is very important but the shipping lanes to SE asia
| and regional stability is more valuable. You can sanction
| China and get in a sanction war with them until one side
| gives in. Or a trade war like trump tried.
|
| Their focus however is to win the war before it starts
| unlike the US which is to win the war after it starts
| (imo).
|
| If it gets to a full in sanction like russia, the western
| economy will tak a massive hit, but it isn' beyond recovery
| and might actually be good to force resilent supply chains.
| Especially with silicon fab.
| vkou wrote:
| War with China is worse than sanctioning China, but
| likewise, war with Russia is worse than sanctioning
| Russia. There's a reason why NATO is content to stand by
| and do nothing.
|
| I can't tell you what will happen if Taiwan is invaded
| tomorrow, next year, or twenty years from now, but I can
| tell you that the US will think long and hard about
| whether or not it will want to get involved. And it might
| well choose not to.
| 01100011 wrote:
| > force resilent supply chains
|
| How many years do you think it would take to build up
| those resilient supply chains? 5 years?
|
| That's 5 years without most products from AMD, Nvidia,
| Tesla and every other TSMC customer. Samsung can absorb
| some of that business, but not much. Intel will shoot to
| the moon in that scenario.
| sesteel wrote:
| It seems like TSMC building a US based foundry may become a
| mitigating factor.
| 01100011 wrote:
| That plant is two years away at least.
| klelatti wrote:
| And each worth less than half of TSMC or Nvidia.
|
| Stepping back, AMD has process advantage in x86 via TSMC and is
| executing very well. Clearly major opportunity to grow with low
| risk at Intel's expense.
|
| Meanwhile Intel has to implement some big changes to stay
| competitive, has major capex needs and is trying to break into
| markets where it isn't present (or competitive) which is clearly
| risky.
| colinmhayes wrote:
| Intel's $20 billion profit is quite a bit higher than AMDs
| entire revenue. The idea that amd's growth opportunities and
| Intels failures are so assured that amd should be worth more
| than Intel is laughable.
| klelatti wrote:
| Profit isn't the only measure - ROC is also highly relevant
| for companies with billions in CapEx. You can make a ton of
| profit with a low ROC and you will deservedly get a low
| valuation.
|
| In any event no one is saying anything is assured only that
| some things are more likely or risky than others. Intel has a
| lot to do and recent execution has been weak. You may think
| that will change but the market will need evidence. AMD on
| the other hand is in the opposite position and gets credit
| for that.
|
| Also you may think it's laughable but there is no should
| about it - it's a statement of fact that AMD's market cap is
| more than Intel's and that fact also plays to AMD's advantage
| in some ways (acquisitions for example).
| [deleted]
| mistrial9 wrote:
| utterly off-topic but to my mind, Intel is a criminal
| monopolist, and has been proven so in court multiple times.
| Perhaps the chickens are coming home to roost?
| mhh__ wrote:
| I don't think Intel will dominate like they did over the last
| decade but if their next process is good the idea that AMD is
| actually producing more value than them I think is quite stupid
| and driven by idiots who don't actually understand the chip
| business.
|
| Good news for consumers either way though. Intel already have
| their crown back in the midrange at least.
| kcb wrote:
| AMD = AMD + Xilinx
| deelowe wrote:
| Intel = intel + altera
| bloodyplonker22 wrote:
| + all the other failed acquisitions
| threatripper wrote:
| They succeeded in failing, meaning they are no longer a
| threat.
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