[HN Gopher] AMD passes Intel in market cap
___________________________________________________________________
AMD passes Intel in market cap
Author : latchkey
Score : 294 points
Date : 2022-08-01 16:31 UTC (6 hours ago)
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(TXT) w3m dump (www.cnbc.com)
| rsp1984 wrote:
| Call me crazy but I think long term (10 years +) the Intel
| strategy of fabricating chips domestically is the correct choice.
| There's a ton of geopolitical pressure in this direction. The US
| simply doesn't want to be dependent on Taiwan for chips, for
| obvious reasons.
|
| Intel knows this and is trying to become the TSMC of the west.
| And frankly they're the only ones that can pull it off. I'd be
| surprised if 10 years from now the majority of their revenue
| comes from selling processors rather than fabricating them for
| AMD, NVIDIA, etc. Why compete when there's plenty of steak for
| everyone?
| snird wrote:
| Are you sure they will?
|
| They seem to prefer dividend payouts rather than capex on new
| fabs[1]. Combined with them moving to FCF loss - I think that
| what you described here may be imaginary at best.
|
| Given what they said in the last earnings call, a slow IBM-like
| death seems more likely.
|
| 1: https://semianalysis.com/intel-cuts-fab-buildout-by-4b-to-
| pa...
| marricks wrote:
| You may very well be right, but it's a bit much to say that's
| Intel's explicit strategy. In the past 12 years the main thing
| Intel has done is make poor long term choices: going big on
| mobile too late, SSDs taking off but not for Intel, whatever is
| gong on with 10nm.
|
| Saying they're committed to fabricating in the US while they
| are, for the first time, relying on other companies to make
| chips for them over seas... right now their domestic
| fabrication may internally be viewed as a blunder.
|
| Sure it could pan out for them but it's a crap shoot. Maybe
| those blunders were just all bad leadership which Intel has
| recovered from, only time will tell.
| zamalek wrote:
| I am a pretty hardcore AMD fan, but fair is fair:
|
| > whatever is gong on with 10nm
|
| The modern 'nanometer system' is nothing more than a bizarre
| versioning scheme (specifically its _usually_ the 'major'
| portion of a semver), and you wouldn't be able to identify a
| physical thing to measure to compare different fabs.
|
| Intel wouldn't have been competitive if they were still on
| their own 14nm process.
| SilverBirch wrote:
| Most of the failure you're stating there predates current
| leadership to be fair. It's difficult to see BK as anything
| other than a massive failure, betting the farm on alternative
| growth engines whilst failing on the core mission.
|
| Reminds me of Facebook actually - if you tell the people who
| build your core product that they're lame, they're goign to
| leave, and your core business will fail.
| zh3 wrote:
| It's not a bad bet, if you're losing market leadership through
| poor execution then getting the government to prop you up as a
| backstop to the bogeyman seems a reasonable tactic.
| wmf wrote:
| It's very hard to lose in the short term, year after year, and
| hope that a black swan event puts you back into a winning
| position.
| spaceman_2020 wrote:
| Unless China's clearly stated policy that recognizes Taiwan
| as a part of China changes, it isn't really a black swan
| event.
|
| It's more like an increasingly active volcano. It might not
| blow up tomorrow, but if you deliberately built a house on
| its edges, it would be hard to sympathize with you when it
| finally does go kaput.
| TuringNYC wrote:
| How does one appease quarter-to-quarter returns chasing
| investors with that?
| panick21_ wrote:
| That assumes the only possible way the China-Taiwan issue
| can be resolved is some kind of event that would disrupt
| the production, ie. war or at least blockade of Taiwan.
| fancifalmanima wrote:
| Not the person you're replying to, but if I ran a chip
| business (or a country with a lot of military/economic
| tech dependent on chips-- IE most countries), it would
| certainly be something you'd want to de-risk if you
| could. Sure it's not the only possible outcome. But it's
| a realistic outcome, and one that has a ton of downside
| if it happens.
| spaceman_2020 wrote:
| If I'm running a country or a multibillion dollar
| business, I'd certainly not want to leave my future
| wellbeing to the good sense of two powers with a gigantic
| historical axe to grind.
| spaceman_2020 wrote:
| Spot on. Any large country that's NOT desperately building up
| fab facilities within the country right now is playing with
| fire. This stuff is the new oil. Insane how little of our
| modern life works without chips.
| noogle wrote:
| Is this about CPUs or all electronics?
|
| Computer chips are in general a reliable hardware, and top-
| of-the-line CPUs are in general way more powerful than
| needed, so there is no need for cutting-edge manufacturing
| and also an embargo won't halt existing activities.
|
| Simpler/embedded processors seem to be a generic product that
| can be manufactured by many countries, hindering embargo
| efforts.
|
| Are chips more critical for a country than e.g. food? because
| many countries are not nutritionally self-sufficient.
| spaceman_2020 wrote:
| Both - CPUs, electronics, military gear, etc.
|
| Strategic risks such as war, invasions, sanctions, etc.
| have to be dealt with on a decadal basis.
|
| You have to ask: what's the current reality, and what's the
| trend?
|
| The trend is pretty clear: our world is going to depend
| more on computers, not less. You have to prepare for a
| world where drones have replaced your fighter jets, where
| every citizen has a smartphone, and where your financial
| system will collapse without working computers and servers.
| SilverBirch wrote:
| I think this is completely wrong. Oil is compustible, at the
| end of the day you don't need a crazy supply chain to make
| use of it, just to make it. You couldd have 99% of a working
| supply chian for advanced eletronics, you're still fucked.
| It's far more fragile than oil.
| stjohnswarts wrote:
| Given that we might be on the verge of war with China over
| Taiwan because Nancy wants to sip a frosty marg in Taipei, this
| isn't exactly sticking your neck out too far lol
| klelatti wrote:
| Your first para is correct but this doesn't mean that Intel
| will become the TSMC of the west.
|
| Doing so needs not only huge amounts of investment but a
| massive change in the business model and by all accounts
| culture. Neither of these are a given at all.
| SkyMarshal wrote:
| Does AMD outsource all their fabrication now, or do they still
| run any of their own fabs? If they outsource everything to TSMC
| then this market cap lead could quickly reverse if hostilities
| break out in Asia.
| kinghajj wrote:
| AMD hasn't had their own fabs since they were spun off as a
| separate company, Global Foundries. They still use GF for some
| things, like the I/O dies on their recent chips.
| chazeon wrote:
| Unsurprised to be honest. I have access to a few HPC resource in
| various HPC center, all the the newer clusters (from ~2yrs) are
| using AMD EPYC CPUs. These are traditionally the market for
| Intel. Landscape doesn't look good for Intel.
| jongjong wrote:
| I had invested in AMD when Lisa Su took over as CEO. I had been
| keeping tabs on the company for some time. Unfortunately I needed
| money to cover my basic living expenses and had to sell all my
| shares about a year later. Even at the time, it was painful
| because I had spent a lot of time researching AMD and I was very
| optimistic about Lisa Su based on her background and her
| tenacity.
|
| I could have made maybe 20x on my investment... Still, I don't
| feel regret. You can only regret things if you had a choice and I
| know that there's no way I could have avoided selling those
| shares.
| keepquestioning wrote:
| This thread is funny, reads like a gamblers support forum
| simonebrunozzi wrote:
| Remember there's also CALL options, if you are really bullish
| on a company. Less capital needed, and more risky, but if
| you're right, you're richer.
| running101 wrote:
| I am still invested. I only got in like 1 or 2 years ago. Kind
| of think I should put more in.
| caycep wrote:
| I probably missed the boat. But thinking now is the time to
| buy INTC and hold off on buying AMD...until the roles are
| reversed again?
| mywittyname wrote:
| A new player could step in and take on Intel. Maybe the
| owners of ARM wise up and get into the manufacturing arena.
|
| People made it big on AMD and Nvidia because they got lucky
| by owning the players who profited from the shakeup that
| cloud computing and ML brought to the industry. If you told
| someone 15 years ago that companies would be buying
| clusters of Nvidia GPUs for $100s of thousands of bucks, I
| doubt many people would believe it.
|
| Intel certainly isn't a bad buy right now. Lots of things
| could happen and the industry will certainly look a lot
| different in 20 years. I can see a path where they manage
| to out-maneuver everyone else, but I think it's just as
| likely that they go the way of other major players.
| CabSauce wrote:
| I was in on AMD at $9. The hype was so real between Nvidia and
| AMD that I got cold feet and sold (for a decent profit). Never
| in my wildest dreams would I have thought it would be here. I'd
| be retired.
| nabla9 wrote:
| Intel is still much bigger company.
|
| Intel revenue 73.39B
|
| AMD revenue 18.88B
|
| TSMC revenue 58.43B
| notemaker wrote:
| Keep in mind their growth rates though. In 2019 AMD had 6.7B in
| revenue and Intel had 71.97B.
| riku_iki wrote:
| Should cost of production be substracted from AMD revenue for
| apple to apples comparison? Intel has in house production,
| why AMD pays premium to TSMC.
| bagacrap wrote:
| Intel also outsources certain components to TSMC. The only
| apples to apples comparison would be to isolate revenue for
| chip sales.
|
| Also TSMC has reportedly surpassed Intel in quarterly
| revenue, so all these numbers are changing quickly.
| kolbe wrote:
| And Intel just cut its 2023 revenue forecast to low 60's
| willmadden wrote:
| I'm curious how the crypto crash and general recession will
| impact AMD. When crypto prices come down, the demand for GPUs
| also crashes. AMD makes a lot of money from graphics cards.
| oumua_don17 wrote:
| The devil is in the details, just looking at revenue won't
| reveal the full picture.
|
| - DCAI, revenue down 16%, operating income down 90% - NEX,
| revenue up 11%, operating income down 60% - AXG and IFS are
| operating loss - Only mobile has rev and op income up
|
| And the CEO has clearly mentioned next quarter will be even
| worse and then they expect things to improve; not sure about
| the improve part though. CFO clearly mentions restructuring
| charges in Q3. Add all of this up and it tells a different
| story.
| nabla9 wrote:
| Market cap reflects those values.
|
| My point is that Intel is huge company. It's going down fast,
| but it has still time to correct.
| frant-hartm wrote:
| Thanks! Intel is only 3.8x as much. AMD used to be tiny
| compared to Intel in both revenue and market cap.
|
| Is there an easy way to get this data over time?
| AnimalMuppet wrote:
| But revenue isn't a meaningful number here. Market cap should
| be today's value of expected future profit, not future revenue.
| So: What's Intel's profit? What's AMD's?
| elromulous wrote:
| So I'm very much in camp AMD. But, market cap has proven over and
| over again to be kind of bogus. E.g. do we really think Tesla is
| actually worth more than the rest of the top 10 or so automakers?
| fallingknife wrote:
| You should use enterprise value (mkt cap + debt - cash), not
| market cap for that type of comparison. It takes into account
| the fact that most other car companies are levered but not
| Tesla. Shows Tesla still very big (overvalued IMO) but not by
| the same ridiculous margin.
| njarboe wrote:
| The top ten automakers have huge amounts of debt and pension
| liabilities. Tesla has neither. None of them are making
| profitable EVs at scale. Tesla has been hitting their goal of
| growing at 50% per year for a decade and plans to continue
| until they are making 20 million cars a year in 2030. Their
| gross margin on cars is the highest in the industry.
|
| The next 5 years are critical for the existing players and many
| will shrink dramatically or go bankrupt. People already know
| this and that is why there is a bill in Congress that is a
| stealth bailout of the domestic auto industry with a $7500 tax
| credit on cars that have just $750 worth of batteries in them.
| itsoktocry wrote:
| > _The top ten automakers have huge amounts of debt_
|
| They have huge amounts of debt because they run huge
| financing departments and therefore also have a huge number
| of assets on the balance sheet.
|
| > _Their gross margin on cars is the highest in the
| industry._
|
| They have a completely different sales model, so it's apples
| to oranges. Most OEMs wholesale cars to dealers, of course
| those margins will be smaller.
|
| > _Tesla has been hitting their goal of growing at 50% per
| year for a decade and plans to continue until they are making
| 20 million cars a year in 2030._
|
| Base rate fallacy, extrapolated into infinity, sure.
|
| > _The next 5 years are critical for the existing players and
| many will shrink dramatically or go bankrupt._
|
| Some will disappear or merge, of course. But the next 5 years
| is also crucial for Tesla, since they are still a rounding
| error in global market share.
| tyree731 wrote:
| > They have a completely different sales model, so it's
| apples to oranges. Most OEMs wholesale cars to dealers, of
| course those margins will be smaller.
|
| Well yes, but they've been successful with this sales
| model, and sell cars all the same, so that makes them more
| valuable in comparison.
| matthewfcarlson wrote:
| Anecdotally, we bought a Tesla a few years ago and it was
| awesome. Just buy it online, walk up, unlocks with your
| phone, and drive away. My spouse (a very socially anxious
| person who despises car dealerships) loved it and said if
| it made sense, she would never buy a car anywhere else.
| Granted, the same experience is rolling out for
| traditional cars (carvana, carmax, etc).
| enragedcacti wrote:
| There are a lot of costs to operating a service center
| and managing customer deliveries that aren't necessarily
| considered in gross margins for Tesla whereas they are
| considered in the case of a traditional automaker in a
| dealership model. I wouldn't be surprised if Tesla still
| has an advantage compared to manufacturer+dealer but we
| won't learn that from comparing vehicle margins directly.
|
| There's also a lot of super weird dealer kickbacks behind
| the scenes that can make gross margin misleading for
| traditional autos, probably in Tesla's favor.
| ajross wrote:
| > Base rate fallacy, extrapolated into infinity, sure.
|
| You only need to extrapolate Tesla's existing revenue and
| growth out for five years to make them the biggest
| automaker in history, though.
|
| Clearly, yes, it's going to stop somewhere. But a first
| principles argument like yours is running out of room. It
| made sense a few years back when they were still popular-
| but-tiny. At this point, the median expectation pretty much
| has to be that Tesla will be the dominant vehicle
| manufacturer globally for the next decade or three.
| tsimionescu wrote:
| Are you being serious? Based on what? They are still a
| tiny tiny player in the auto industry, if we ignore the
| market cap.
| jjoonathan wrote:
| > of course those margins will be smaller.
|
| You know that this whole game is about profits, right? If
| "of course" TSLA's margins are higher, "of course" their
| market cap will be higher.
|
| And yes, investors are aware that this is a function of
| market segment. It's also a function of vertical
| integration, manufacturing prowess, unions, and retirees.
|
| > debt because they run huge financing departments
|
| Debt isn't the right metric to focus on, but the
| fundamental point is that if legacy auto perfectly executes
| a pivot, they get to keep their cash flows, while if TSLA
| keeps up the status quo, they expand their cash flows.
|
| There will be a lot of stranded assets and failures to
| pivot in the legacy auto sector. Investors know it and the
| market caps got carpet bombed to reflect it. TSLA's didn't.
|
| > Base rate fallacy, extrapolated into infinity
|
| > Tesla, since they are still a rounding error
|
| Do you not see the connection? Not only _can_ we
| extrapolate, we can extrapolate far more precisely than
| usual because we already know the size and shape of the
| market they are expanding into. Usually these models take
| the form "TSLA grows 50% yoy until they top out at 1/3 of
| non-China auto sales" or something, and these are the
| models that back the current valuations. Optimistic? Sure,
| but not nearly as optimistic as "base rate fallacy,
| extrapolated to infinity." Lol.
| r00fus wrote:
| > >Their gross margin on cars is the highest in the
| industry.
|
| > They have a completely different sales model, so it's
| apples to oranges. Most OEMs wholesale cars to dealers, of
| course those margins will be smaller.
|
| This is the crux of the innovator dilemma - that their
| dealer sales model was a moat to prevent new entrants, and
| it could be their lodestone as well, preventing them from
| actually being able to compete with Tesla (since shifting
| from that will likely prove to be difficult/impossible).
|
| Doesn't hurt Tesla that dealers are notoriously unpopular
| with customers.
| outworlder wrote:
| The P/E for Tesla suggest it is going to take decades(at the
| peak, over a century) for that valuation to make sense.
|
| Even if it grows to the point that it destroys all other
| automakers and become a monopoly, it's still too high. You
| can only sell so many cars.
|
| The valuation seems to be taking into account that Tesla is
| not only about cars, but also artificial intelligence, which
| would allow it to expand to other markets(taxis, maybe even
| military).
|
| Jury is still out.
| bryanlarsen wrote:
| Huh, Tesla P/E is 107, so it'd require about a 5X growth in
| income to reach a sane P/E. If it keeps growing at 80%
| p.a., that'll take about 3 years. 4 years at 50% growth.
| And a 5X increase isn't unreasable, that's still under 10%
| market share.
| njarboe wrote:
| If Tesla does make 20 million cars that sell for an average
| of $50k and have net margins of 20%, their annual revenue
| would be $200 billion. If at that point they have the same
| PE as Apple has now (~25), that would be a market cap of $5
| trillion. That would be a 6x gain from today just on
| regular auto sales. If the only side project that works out
| is Full Self Driving (which is the major focus of Tesla and
| occupies most of Musk's Tesla time) comes to pass, double
| that revenue would not be unreasonable. There are many
| things that could go wrong, but lots up possible upside.
| RC_ITR wrote:
| The real criticism of Tesla is that there are about 65m cars
| sold per year now globally.
|
| If every one of those cars has $10k of profit (way too high,
| but for arguments sake), that's $650bn of profit per year.
|
| When a single company with less than 1% share of sales has a
| market cap higher than the entire theoretical annual profits
| of an industry, that implies an _insane_ amount of
| speculation (about things like Robo taxis and insurance, etc)
| distances wrote:
| > The top ten automakers have .. pension liabilities.
|
| I don't think this part is true. I haven't heard of _company
| pensions_ being a thing outside of US. I doubt VW, Toyota or
| Daimler have any pension liabilities at all, barring their US
| subsidiaries.
| victor106 wrote:
| > a stealth bailout of the domestic auto industry with a
| $7500 tax credit on cars that have just $750 worth of
| batteries in them.
|
| As it currently stands the $7500 limit is only for the first
| 200,000 cars. Tesla benefited a lot from it and exhausted its
| limit back in 2018.
|
| https://www.reuters.com/article/us-tesla-tax-credit/tesla-
| hi...
| ssharp wrote:
| The bill the commenter was mentioning is currently in the
| Senate and hasn't been voted on yet. It would bring back
| the $7,500 credit for any EV that is built in the U.S. and
| removes the 200,000 limit. The bill also changes the
| mechanics of the credit so that it is applied immediately
| off the purchase price rather than a tax credit whenever
| you file. It also allows for up to a $4,000 credit on used
| EV's.
| victor106 wrote:
| Got it,
|
| Is there anything in the bill that excludes Tesla from
| access to those credits?
| enragedcacti wrote:
| Here is the summarized set of rules:
| Federal tax credit for EVs will remain at $7,500
| Tax credit cap for automakers after they hit 200,000 EVs
| sold is eliminated, making GM, Tesla and Toyota once
| again eligible The language in the bill
| indicates that the tax credit would be implemented at the
| point of sale instead of on taxes at the end of the
| fiscal year In order to get the full
| credit, the EV must be assembled in North America, the
| majority of battery components need to come from North
| America, and contain a certain percentage of minerals
| from countries with free trade agreements with the US
| Includes a new federal tax credit of $4,000 for used EVs
| Includes zero-emission vans, SUVs, and trucks with MSRPs
| up to $80,000 Electric sedans priced up to
| $55,000 MSRP also qualify The full electric
| vehicle tax credit will be available to individuals
| reporting adjusted gross incomes of $150,000 or less, or
| $300,000 for joint filers
|
| https://electrek.co/2022/07/29/which-electric-vehicles-
| still...
| victor106 wrote:
| Thanks you, Those rules seem fair enough.
| kbenson wrote:
| > $7,500 credit for any EV that is built in the U.S
|
| > It also allows for up to a $4,000 credit on used EV's.
|
| I can't wait for the eventual headline about how
| dealerships would sell cars to themselves so they could
| resell them and pocket an extra $4k.
|
| I have no doubt that story will happen and come out, I'm
| just wondering whether it will be during or after it's
| common, and how widespread the abuse will be, given that
| even if there are provisions to prevent that, some
| enterprising fraudsters will find a way.
| mywittyname wrote:
| Dealerships are collectively, very powerful groups. This
| would not the be first time they've convinced Congress to
| dump money into their pockets with such schemes. CARS Act
| comes to mind.
|
| The outrage will come, but dealerships will have bled
| every dollar they can before anything is done. And the
| same people voting for the bill will come out next year
| campaigning against such corruption and stupidity by the
| government.
| duped wrote:
| I think GP is referring to the Climate Bill being debated
| in Congress this month where the 200k limit would be lifted
| and an additional $4k tax credit given to used EV
| purchases.
| jmyeet wrote:
| Tesla's valuation is roughly $800,000 per car they shipped
| last year. Compare this to Ford, which is roughly $30,000.
| Quick googling shows Ford has $138B on total debt, a market
| cap of $60B and produced almost 2M cars. Tesla still has $30B
| in debt.
|
| When you start looking at assets, it gets more interesting.
| Tesla's assets are ~$68B. Ford's $257B.
|
| You can't just magically produce more cars. You need more
| people, more batteries, more factories and other significant
| capital expenditure.
|
| My point is that "growth" is used as an excuse for Tesla's
| valuation but any look at comparative numbers should show you
| it's _way_ out of whack compared to any auto maker. And as
| the F150 shows, Tesla 's dominance of the EV market isn't as
| sticky as it would need to be to justify that valuation.
|
| Cybertruck anyone?
| beckingz wrote:
| That's a huge amount of working capital at Ford! Wow.
| axlee wrote:
| Tesla's only claim to profitability is government-enforced
| carbon compensation laws. Tesla is basically a greenwashing
| insurance that masquerades as a real automaker, don't get
| fooled.
| panick21_ wrote:
| This is nonsense. The kind of argument uninformed people
| who dislike Tesla pick up on twitter and then endlessly
| regurgitate over every online forum.
|
| The revenue Tesla gets from credit is very small compared
| to the revenue of cars and gets smaller and less
| significant with every single quarter.
| Kranar wrote:
| It's cheaper to to provide that government-enforced carbon
| compensation than it is to provide the massive amounts of
| subsidies and tax credits that oil companies get.
|
| In other words, the government actually saves money every
| time someone buys an electric vehicle.
| asdajksah2123 wrote:
| Both things are true though.
|
| Oil companies get massive subsidies. And Tesla's survival
| is dependent on green subsidies.
|
| There's an easy (and I'd daresay, correct) solution
| there. Not subsidizing oil and reducing green subsidies.
| Unfortunately, it's not politically palatable.
| parkingrift wrote:
| I doubt that Tesla can continue to grow 50% YoY as soon as
| 2023. The Model S, X, and Y are extremely expensive compared
| to the competition.
|
| I'm in the market for an electric SUV right now. The Kia EV6
| and Hyundai Ioniq 5 both seem legitimately better than the
| Model Y, and they are substantially less expensive.
|
| The Model Y AWD Long Range is $68,000. The Ioniq 5 SEL is
| $52,000. Tesla has historically never had to compete on
| price, but those days are ending. Either Tesla will lower
| their prices and their margins, or they will suffer lower
| sales. Competing on price is the future Tesla desperately
| wanted to avoid, but Tesla has not been able to scale fast
| enough to avoid it.
|
| Good luck to Tesla shareholders. It's a car company that the
| market is valuing as if it were a high growth tech startup.
| bryanlarsen wrote:
| Tesla has a 20% margin and are still bringing online many
| measures to drastically reduce their costs. The complexity
| reduction in the upcoming Model Y's with dual gigacasts and
| batteries is massive. If they have to compete on price,
| they will. They know price competition is coming and are
| planning for it. Mass market was in their long term plan
| from day one. But they won't lower their price until
| they're forced too. Too soon would just leave money on the
| table like Hyundai is.
|
| But for now they are competing quite well against the Ioniq
| 5. Dealerships are now taking reservations for 2025 models
| of the Ioniq 5. Many people would rather pay an extra
| $16,000 than wait over 2 years.
|
| I don't think Tesla is overvalued. Some (but not all) of
| the traditional manufacturers are undervalued. Which ones,
| though, that's the hard question.
| parkingrift wrote:
| >Tesla has a 20% margin and are still bringing online
| many measures to drastically reduce their costs.
|
| Hard to take this seriously when Tesla has raised their
| prices multiple times over the past 18 months. Their
| margins aren't increasing, just their prices.
| asdajksah2123 wrote:
| Tesla is still making poor quality cars. No other car I've
| seen spends as much time in repairs as Teslas do.
| beeboop wrote:
| Source?
| jml78 wrote:
| If you are taking the model S and X sure. model 3 and Y,
| negative.
| nottorp wrote:
| The one model 3 I've driven had the left rear door not
| aligning with the car's body when closed. It's hard to
| trust Tesla's manufacturing when you see that.
| spullara wrote:
| You've never owned a BMW then.
| daveidol wrote:
| Modern BMWs are actually quite reliable - just expensive
| to repair.
| samfisher83 wrote:
| That's a pretty low bar.
| spaceman_2020 wrote:
| I did find the fit and finish of the S class decidedly
| poorer compared to the Mercedes EQS. Tesla simply does
| not have the craftsmanship capability to build something
| truly luxurious like Mercedes.
| Aloha wrote:
| I dont think they can continue to grow at that rate and
| preserve their gross margin. The high end part of the market
| isnt large enough to sustain 20m cars a year. To give you an
| idea, for scale, the two largest producers made 10m each in
| 2019 roughly respectively - and those two are VW and Toyota.
| I cannot see in any way for Tesla to displace that many units
| and maintain their margins at the level they have them.
|
| The big three domestic manufacturers largely shed their
| pension liabilities to the UAW when they last went (or nearly
| went in the case of Ford) bankrupt in 2008.
| itsoktocry wrote:
| > _and maintain their margins at the level they have them._
|
| Tesla's margins shrunk quite a bit last earnings report, so
| I agree. Selling high-end cars in a niche market is easier
| than selling 20 million cars annually (which no one has
| ever done before).
| Aloha wrote:
| I'm skeptical that anyone can make 20m cars a year. It
| also doesnt surprise me that Teslas margins have shrank,
| I think the price of their vehicles is rendered somewhat
| inelastic because of the preorder-purchase contract
| system they use. The vehicle price is more or less fixed
| at the time of order based on my understanding, and while
| they can retroactively increase prices, it will likely
| result in abandonment of the order.
| kbenson wrote:
| > I'm skeptical that anyone can make 20m cars a year.
|
| There's just over 30m seconds in a year, that's a car
| every second and a half. That seems like it would take a
| lot of assembly lines to pull off ignoring other
| constraints.
|
| On the other hand, at 184.8'' for a model 3, that's like
| a stream of them bumper to bumper leaving a single
| assembly line at 6.65 Mph for the entire year. Viewed in
| that light, maybe it doesn't take that many assembly
| lines to reach a speed at which this would be achievable,
| ignoring other very important constraints. (Or maybe I
| made a mistake in my math.)
| mg wrote:
| I heard the same arguments when Apple had a hit with the
| iPhone. The high end of the market is saturated, and soon
| the competition would bring down the prices. But the price
| of the iPhone continued to go up. It never stopped going
| up. Because it continued to offer more and more value.
|
| People already see some value in Teslas self-driving
| technology. And that value will continue to go up for a
| long time.
| anony999 wrote:
| >> People already see some value in Teslas self-driving
| technology. And that value will continue to go up for a
| long time. Up to the point where you tell your car "Hey,
| go get me a pizza".
|
| You are aware that real self driving(L5) is not possible
| without some AI breakthroughs, right? All the promises
| you see from Elon are just pure BS. Your tesla has issues
| seeing a big truck straight in front of the driver lane
| so you can forget the "Hey, go get me a pizza" command.
|
| I can't really see many reasons to buy a Tesla except its
| propulsion technology (i.e. big batteries). I doubt
| that's enough to compare it with the iPhone which was
| really more about software than hardware. Tesla
| software/user experience is not significantly better than
| a dumb car with carplay or just an ipad fixed on board.
| The only way for Tesla to win more market share is for
| the competition to ignore/defy the wanna be EV consumers.
| diydsp wrote:
| > Tesla software/user experience is not significantly
| better than a dumb car with carplay or just an ipad fixed
| on boar
|
| That's only part of it. It also includes the prestige and
| social cache. Once upon a time, apple was the same. Me, i
| don't care, but all the fancy ppl around me, the multi
| generational wealthy and boomers, can't get enough
| Teslas. That desire for luxury may wax like apple... or
| the coming recession may sponch it.
| nottorp wrote:
| > Tesla software/user experience is not significantly
| better than a dumb car with carplay or just an ipad fixed
| on boar
|
| I'd say it's much worse. Putting all the controls
| including a/c on the tablet is an extremely bad idea.
| Aloha wrote:
| You can squeeze to afford a 900 dollar phone. You can't
| squeeze someone from a 30,000 dollar car to a 90,000
| dollar one, the math doesn't work.
| asdajksah2123 wrote:
| There are several differences. 1) Apple has massive
| platform benefits. phoneOS, macOS, watchOS, tvOS devices
| all work really well together. If you buy into 1 part of
| the ecosystem, the incremental value of switching another
| device to an Apple device is really high. 2) The high end
| in cars and phones are 2 orders of magnitude different.
| Spending a few hundred dollars more to buy into the high
| end for a smartphone is a stretch many consumers can
| make. Spending a few tens of thousands of dollars more to
| buy into the car high end is not a stretch many consumers
| can make. Heck, you could buy a new high end smartphone
| with the amount you pay every 2 months for a shitty car.
| 3) Apple's devices are the best in class in nearly every
| measure, especially build quality. Tesla is still far
| behind its competitors in build quality.
|
| This is not an argument against Tesla. It's an argument
| cautioning against comparing Tesla to Apple. Heck, it's
| an argument cautioning comparing any company today or in
| the history of companies to Apple.
| enragedcacti wrote:
| > I heard the same arguments when Apple had a hit with
| the iPhone. The high end of the market is saturated, and
| soon the competition would bring down the prices. But the
| price of the iPhone continued to go up. It never stopped
| going up. Because it continued to offer more and more
| value.
|
| The most expensive iPhone kept getting more expensive but
| for almost it's entire history there has been a <$450
| iPhone despite inflation and the overall rising average
| purchase price of a smartphone.
|
| Apple doesn't compete in the ultra-budget space but
| pretty much from the get-go Apple has been competing on
| price and value with older models, the 5c, the SE line,
| the XR, etc.
|
| For reference, iPhone 1 released at $715 2022 dollars
| compared to the $400 SE available now.
|
| https://www.gsmarena.com/charts_show_the_evolution_of_iph
| one...
| nottorp wrote:
| Problem is, Apple's competition is ... not so good.
| Doesn't go for Tesla vs other car manufacturers.
| colinmhayes wrote:
| Huge difference between $500 extra and $20,000 extra.
| Most working people can sacrifice and afford the 500.
| Most literally have no way of affording a Tesla.
| philsnow wrote:
| > None of them are making profitable EVs at scale.
|
| Is the f150 lightning not profitable for Ford? I looked just
| now and can't find any information (maybe have to wait until
| next fiscal year?). Their costs for that line are lower than
| most other automakers because they share so many parts and
| design elements with the ICE f150.
| mywittyname wrote:
| I don't think Ford has released this information yet, and
| it's really too soon to judge either way, considering
| manufacturing issues and price instability. The Mach-E went
| from very profitable, to a losser basically overnight as
| battery prices skyrocketed.
|
| At this point, battery manufacturing is EV manufacturing.
| Battery costs are such a large percentage of overall costs
| that the entire margin of a vehicle can evaporate at the
| whims of a supplier.
|
| I think we need to wait and see how SKBlueOval does before
| we can really judge Ford's EV performance.
| tiahura wrote:
| Things are worth what others are actually willing to pay, there
| is no such thing as a metaphysical true worth.
|
| So yes, Tesla is actually worth whatever the market cap is.
| ido wrote:
| The less literal reading of OPs statements is that Tesla is
| overvalued & will at some point in the future face correction
| down to a value more in line with their sales/profit
| potential.
|
| I have no horse in the game (no Tesla nor any other
| automotive stocks) but we've definitely seen companies being
| massively overvalued in the past and then face fierce
| correction - AOL was once worth $222 billion and later (not
| even that much later) sold for less than 1% of that.
| tiahura wrote:
| We've been hearing that for at least 4 years at this point.
| Along with scenarios where Volkswagen or Ford is going to
| teach Tesla how things really work. I'm not persuaded.
|
| First, my understanding is that Tesla has a night and day
| lead in battery sourcing.
|
| Second, Tesla doesn't have the legacy costs that the others
| do.
|
| Also, at this point, Tesla is still selling cars faster
| than they can build them. Even if demand weakens, they may
| still be at max output.
| tsimionescu wrote:
| Sure, but Tesla is selling high end cars, which are a
| rounding error in the car market.
| enragedcacti wrote:
| > First, my understanding is that Tesla has a night and
| day lead in battery sourcing.
|
| They have a factory where Panasonic employees come in and
| make batteries for them (a little glib, but not that far
| off), but aside from that they really don't have some
| secret sauce that we know about. They are putting CATL
| batteries in their cars just like everyone else and they
| don't have any mining or refining operational unlike BYD.
| Their battery research and production is massively behind
| schedule and the future of the Model 3, Y, and Cybertruck
| all depend on volume 4680 production which is behind at
| Panasonic as well.
|
| Ford has the supply for 400,000 EVs lined up between now
| and 2024 and Volkswagen has the supply to outproduce
| Tesla in 2024. BYD is already producing more PHEV/BEV
| than Tesla, and if there is a solid-state breakthrough it
| won't be happening at Tesla.
| ido wrote:
| Even aside from all of that, I was just reacting to the
| overly simplified "well by definition they're worth what
| the market says they are so there's nothing to discuss
| beyond it".
|
| The stock market is routinely "mistaken" and stocks get
| overhyped and then crash down later (or vice versa). It's
| not some omniscient deity that's never wrong (except in a
| very literal and impractical way of looking at it).
| panick21_ wrote:
| You are making a number of mistakes.
|
| First of, Tesla is buying massively from Panasonic, LG
| and CATL. They are also doing their own batteries in
| addition to that. The production of that is behind
| schedule, but not that far, and I can believe how little
| credit Tesla is getting for literally turning into a
| battery company over just a few years. Their batteries
| are gone give them a huge advantage in margin.
|
| > depend on volume 4680 production which is behind at
| Panasonic as well
|
| Tesla 4680 have nothing to do with Panasonic. Panasonic
| is also gone make 4680 format cells for Tesla, but those
| are totally different and have nothing to do with the
| cells currently shipping from Texas.
|
| > Ford has the supply for 400,000 EVs lined up
|
| Tesla makes that many in less then 6 month. And there is
| a large difference between signing a supply agreement and
| actually getting it. The lithium industry had scaling
| problems and pretty much all expert suggest a shortage is
| coming.
|
| For Ford to get all those materials, it requires a huge
| number of supply expedition projects to go correctly and
| that is not at all guaranteed.
|
| For until a few years ago didn't even believe that had to
| worry about batteries or battery materials at all. And
| since then they have done a 180 and try to tell everybody
| how EV focused and smart they are, when in-fact they are
| behind the curve.
|
| > Volkswagen has the supply to outproduce Tesla in 2024
|
| Not sure where you got this from, but its false.
|
| > BYD is already producing more PHEV/BEV than Tesla
|
| Nice that you snuck PHEV in-there. But yeah BYD is a
| great company, but their cars are mostly China only.
|
| > if there is a solid-state breakthrough it won't be
| happening at Tesla.
|
| Solid stage or rather what people actually mean by that,
| lithium anodes, is not inherently superior to silicon
| anodes. Andt Tesla has some of the most interesting
| research in that direction.
|
| Also solid state will not really be relevant in the BEV
| space for many years to come.
| FinalBriefing wrote:
| That idea seems to be ignoring the fact that other brands
| just haven't made EVs yet. People want Telsas now because,
| for a long time, they were the only good EVs on the market.
| As other companies are now rolling out their first EVs,
| Tesla's market cap will surly go down.
|
| I've also heard the argument that Tesla's network of chargers
| brings more value, but...there will also be more competitors
| in that space in the near future (and today).
|
| So, it seems shortsighted to believe that "market cap" is
| going to remain as high as it is today.
| panick21_ wrote:
| The idea that other companies are now rolling out their
| first EVs is complete nonsense. The argument 'competition
| is coming' I have been hearing since 2014.
|
| There are many EV that came out that most people don't know
| much about since they were not produced in large numbers.
|
| And we should also consider that the battery space is
| running into material shortages and Tesla had the longest
| to prepare for that and are the largest buyer of battery
| materials/batteries on the plant.
|
| Other companies might want to sell more EV, but they will
| literally not be able to.
| tiahura wrote:
| You moved the goalpost. What the market cap will be
| tomorrow is a different question than what is it worth
| right now. Shares of TSLA are trading at the market price
| right now. Tomorrow the price and market cap may be
| different, but it will still be the price sellers will sell
| and buyers buy.
|
| There is no true value set by Buddha, Buffet, Robinhood, or
| ML.
| mimikatz wrote:
| Yes we do, that's literally what a marketcap is. People who are
| sure it isn't correct can beat against it and profit in the
| correction.
| ClumsyPilot wrote:
| > People who are sure it isn't correct can beat against it
| and profit in the correction.
|
| the market can stay crazy lobger than you can stay solvent.
|
| You losses in shorting are unlimited. Every i vestor from
| Warren Buffet to my dog strongly advises against shorting
| myownpetard wrote:
| > You losses in shorting are unlimited.
|
| Buy puts.
|
| > Every i vestor from Warren Buffet to my dog strongly
| advises against shorting
|
| If you are not sophisticated enough to take a short
| position, you are probably not sophisticated enough to buy
| a specific equity. This is true of essentially everyone who
| does not invest professionally, including myself.
| wavefunction22 wrote:
| I think market cap is a bit misleading. Enterprise value
| (market cap + net debt) is a more consistent valuation
| measure.
|
| The house analogy is a helpful one. Let's say I buy a million
| dollar house but I only have $100K of equity in it so far. My
| market cap is $100K and my debt is $900K. I'd argue that the
| house is still worth a million dollars.
|
| This is important here since Tesla has much less debt vs. the
| rest of the auto industry.
| 300bps wrote:
| Market cap should take into consideration debt and all
| other valuation variables of a company. It's literally what
| people are saying the company is worth. If you subtract
| debt from market cap to get the value of a company you'll
| be subtracting debt twice.
|
| Your house analogy and the way you explained it does not
| make sense to me. Since market cap is what the market is
| saying a company is worth, it isn't right to equate that to
| the "$100k of equity" in your example house. It's more
| correct to equate it to the $1 million value the house has.
| wavefunction22 wrote:
| Market cap isn't saying what the 'company' is worth. It's
| a measure of the equity portion of the ownership of the
| company. It excludes the debt portion of the ownership.
|
| Right now GM has an enterprise value of $130B. That means
| it's expected to spit out $130B of cash over its lifetime
| (discounted to a present day value). But the market cap
| is only $50B. Meaning $80B of that future cash will go to
| GM's lenders.
|
| It of course feels super counter-intuitive to add debt
| (which feels like it should be a negative) to the
| valuation. But I always felt the house analogy gives an
| intuitive everyday example.
| tsimionescu wrote:
| But they also have far, far fewer assets, and even farther
| fewer actual cars.
| JonShartwell wrote:
| Does the word "correction" not imply that the previous price
| was incorrect?
| googlryas wrote:
| Not exactly, because you need to look at depth of market as
| well. If I find one idiot to buy 1 share of my stock (out of
| a trillion) for $1, that doesn't mean I really have a $1T
| market cap.
| nicoburns wrote:
| > Yes we do, that's literally what a marketcap is.
|
| I mean in theory. In practice:
|
| - You have to use a very specialised definition of "we".
| Specifically, it's what people think, _weighted by how much
| money they control_. So wealthy people have an outsized say
| in market cap. Controllers of hedge funds, pension funds, etc
| an even more outsized say.
|
| - People's pricing can be based on how they expect other
| people to price the stock in the future rather than how much
| they think it is truly worth based on the fundamentals of the
| business. If someone's price is based on this, then it is no
| longer a reflection of how much they think it's worth.
| The_Colonel wrote:
| Shorting is much more risky than buying stocks. Compare:
|
| 1) I'm confident that in the long term, company X will grow
| in value. I invest $1000 and will wait however long it will
| take, 10 or more years. I risk these $1000 only, but can earn
| multiple of it.
|
| 2) I'm confident that in the long term, company Y will
| decrease in value. I can short it with $1000, however either
| I risk much more than $1000 or I can't set the timeframe
| (because of forced liquidation). I also can't earn more than
| $1000. In the long term, I'm also exposed to inflation.
| Effectively, it's possible to short only in a short
| timescale, which is super risky.
|
| The two betting options are very asymmetric, which IMHO
| favors overvaluation of certain hyped stocks, since there's
| no reasonable (not extremely risky) way to bet against them.
| game-of-throws wrote:
| There are ways to bet against stocks that don't expose you
| to unlimited downside.
| The_Colonel wrote:
| Do you have more information? I'm interested.
| game-of-throws wrote:
| Options. https://www.investopedia.com/terms/p/put.asp
| ericd wrote:
| The timing aspect is still brutal, though. Market can
| stay irrational for a very long time, and prove you
| totally right but totally broke if it waits until after
| your puts expire.
| [deleted]
| theropost wrote:
| Yes, people think Tesla is more valuable than the other car
| markets combined. I honestly don't see the ICE manufacturers
| really having an edge when it comes to the future of
| transportation. If anything, I see them having a huge liability
| - that is a large workforce to reskill, pensions to pay,
| antiquitated plants to upgrade/maintain, old supply chains to
| wind down, new supply chains to wind up - if anything, newer
| entrants into the electric vehicle racket have an advantage.
| Aloha wrote:
| I think they still have a significant lead in actual
| production manufacturing engineering. It's one of the primary
| things they do, and have some of the best minds in the world
| for it. I think Tesla can catch up, but right now Tesla has a
| very outmoded plant itself, its a former GM plant built in
| the 60's and rebuilt for NUMI in the 80's. While they're
| building new ones, a majority of the big three's plants date
| from 1980-2005, and are newer in structure.
|
| If you talk about _how_ cars are built, all auto manufactures
| seem to follow the same basic model to build cars, robotic
| welded bodies, a mix of manual and robotic paint and a moving
| assembly line to put the rest on - everyone does it the same
| way with some minor variations. Similarly Toyotas JIT supply
| system is used the world over by all auto manufacturers
| because it improves the balance sheet.
| UncleOxidant wrote:
| > I honestly don't see the ICE manufacturers really having an
| edge when it comes to the future of transportation.
|
| I honestly don't see that it's difficult for ICE
| manufacturers to compete in the EV space. We're seeing most
| ICE companies at least dipping their toes into the EV space,
| and in some cases they're going all in (Hyundai/Kia, VW, for
| example) and offering strong alternatives to Tesla.
| sorry_outta_gas wrote:
| If anything EV seems easier than ICE
| 988747 wrote:
| > antiquitated plants to upgrade/maintain
|
| LOL, it's Tesla that is way behind in manufacturing. They had
| trouble hitting their production targets, and they still have
| quality problems. Toyota/Volkswagen etc will have zero
| trouble switching their production lines to electric cars,
| and when they do they will manufacture cheaper, faster, and
| better.
|
| > old supply chains to wind down, new supply chains to wind
| up
|
| Again, advantage at putting together supply chains is with
| traditional manufacturers, because of their experience.
|
| EDIT: Tesla seems to have problems even hiring workers for
| their factory in Berlin, never heard of any German
| manufacturer having similar problem.
| Xixi wrote:
| Unless Tesla figures out how to manufacture cars with much
| lower carbon emissions (I mean, the manufacturing of the cars
| themselves), Tesla is not going to fare _that_ much better
| than the legacies.
|
| I hope they do figure it out...
| itsoktocry wrote:
| > _antiquitated plants to upgrade /maintain_
|
| Compare a state-of-the-art BMW plant to _any_ Tesla plant.
| Modern auto OEMs have been full automation for a long time.
| svara wrote:
| Maybe some people think that, but sometimes people are
| deluded or simply are investing based on the greater fool
| theory.
|
| The latter reason means that even the market as a whole might
| not actually believe in the current market cap, in the long
| term.
|
| I'm personally super skeptical of this market cap. I've been
| renting a Tesla Model 3 the last couple weeks. It's an
| awesome car that I would recommend to anyone. When you first
| drive it you can appreciate what a good job Tesla have done
| to make it feel like a car from the future. But at the end of
| the day it's a car. It's got lots of small flaws too, and the
| self-driving features have scared the shit out of me due to
| errors they made more than a few times already.
|
| Based on this experience it seems completely implausible that
| Tesla will be able to keep up this "car from the future"
| experience for very long. How? They're not a leader in self
| driving, and even if they were, why would they remain so
| indefinitely? What other innovations would justify this
| image? People will get used to electric vehicles very
| quickly, that won't feel new anymore before long.
| 7952 wrote:
| I think you are overestimating the rationality of car
| customers. Legacy car companies have been pulling a slight
| of hand for years. Build an aspirational dynamic brand that
| delivers compromised products that hurt the customer.
| People will become financially and emotionally invested and
| then you have them. The long lasting metal seal can be
| replaced with plastic. Safe emissions can be replaced with
| a defeat device. And practical small cars can be replaced
| with city cars that are too small for a stroller/pram.
| Brilliant!
| EduardoBautista wrote:
| The other automakers are not in the energy business like Tesla
| is.
| acchow wrote:
| The reason the other automakers are valued so low is because
| their long-term growth prospects are negative. The market does
| not think Ford and GM will be dominant players in 20 years when
| cars are half software
| elromulous wrote:
| To reply to some of the comments:
|
| * Yes, something is worth what someone is willing to pay. But
| we know Mr market is temperamental and irrational, so really
| what I'm saying is, in the long term / low pass filtered
| version, do we really think Tesla is worth more than the next
| 10.
|
| * Re anecdotes in which market cap is correct - this doesn't
| prove anything. E.g. a random number would be correct some of
| the time also.
| sbf501 wrote:
| This is implicit when understanding market cap. Market cap
| means yes, a certain number of people willing to buy Tesla
| believe it is worth the combined cap of the next 10 auto
| makers. It doesn't matter if that is right or wrong, all that
| matters is that stock traders believe it. If they didn't, the
| stock wouldn't be that price. That is literally how the stock
| market / market cap works: if someone will buy it at that
| price, that is what it is worth.
|
| We can all offer our armchair theories about Tesla's actual
| worth, but until traders start to move en masse, that is what
| it is worth right now.
|
| I think you are asking a different question: will Tesla be more
| _profitable_ than the other 10 manufacturers in the long run?
| Because right now they are not. Personally. I don 't think they
| will ever scale to a commodity car as long as Elon is at the
| helm. I don't think he has the attention span to make a mass
| produced car, his ego likes doing something novel and he likes
| luxury. To make profit like the top 10, Tesla has to become a
| commoner car. I don't think he can pull off an iPhone move,
| Tesla may always just be a Mac.
| namecheapTA wrote:
| I know several people that bought Tesla stock in the last 3
| years, and I know for sure that none of them think about it
| in terms of being worth more than most of the other companies
| or combined. They bought the stock because they like the
| cars, see the cars often, and most importantly, they think
| the stock will rise and make them money.
|
| They don't know how many outstanding shares there are, what
| the market cap is relative to others, or even care about
| profit ratio is. They just think it's going up.
| [deleted]
| avmich wrote:
| > and he likes luxury
|
| I would argue otherwise, his movement in the recent past
| showing.
| sbf501 wrote:
| I'll bite: what is your argument?
| fsckboy wrote:
| > _market cap has proven over and over again to be kind of
| bogus_
|
| how do you know when a competitor with a high market is
| failing? when its market cap... er, goes down. i.e. market cap
| is the best measure we have of a company's future prospects.
| What you are seeing over and over is that the future is
| unpredictable.
| rjsw wrote:
| I'm not sure this is bogus, Xilinx > Altera.
| api wrote:
| One of the most destructive things you can do to a company is
| give them a near market monopoly for a while.
| rapsey wrote:
| And put bean counters in charge.
| iasay wrote:
| Ah yes HP 1999 calling there...
| BeetleB wrote:
| This trope needs to be put to rest. Brian Krzanich was a tech
| insider and Intel fared poorly under him. The current CEO is
| as much of an insider, and it's still doing poorly under him.
| fuzzieozzie wrote:
| I hate to say it, but a leader who lives in fear of this is
| what Intel needed to stay ahead. Andy Grove believed and lived
| in fear of monopoly power ... since then CEOs at Intel have
| lacked that conviction.
| pietroq wrote:
| "Only the paranoid survives" - Andy Grove
| bloodyplonker22 wrote:
| While also putting an MBA in charge.
| [deleted]
| papito wrote:
| Fighting complacency is not easy.
| compumike wrote:
| Longer term (1980-present), it's been a very rough ride for
| public equity holders of either INTC or AMD:
| https://totalrealreturns.com/s/INTC,AMD
|
| Intel is still below its year-2000 peak (even in inflation-
| adjusted, dividend-reinvested terms).
|
| AMD's growth since ~2015 all-time lows is incredibly impressive:
| https://totalrealreturns.com/s/INTC,AMD?start=2016-01-01 Ryzen
| was launched in late 2016 -- was that the catalyst?
| duped wrote:
| > AMD reports fiscal second-quarter earnings on Tuesday, when
| investors will be watching to see if it is facing the same
| macroeconomic challenges as Intel as PC sales drop around the
| world.
|
| Intel revenue fell 7% (YOY) in Q1 and 22% in Q2. AMD revenue grew
| 71% in Q1. Something tells me they aren't facing the same
| macroeconomic challenges.
| greggyb wrote:
| They are facing the same macroeconomic challenges (pretty much
| tautologically). AMD is and has been taking market share from
| Intel.
| duped wrote:
| Sarcasm doesn't translate well online, I meant that Intel's
| problems don't seem to be macroeconomic when AMD is seeing
| high growth (it's not just grabbing Intel's marketshare, they
| also saw big growth in custom silicon and embedded).
| hedora wrote:
| Sure it is. Intel's failure to deliver much in the last
| decade has become a macroeconomic drag, since demand has
| shifted to competitors with limited manufacturing capacity
| -- look at the impact on chip shortages on cars, for
| example.
|
| It's creating different challenges for AMD and Intel
| though.
| bluSCALE4 wrote:
| Much deserved. Let's see Airbus take over Boeing next.
| adamsmith143 wrote:
| For comparison: AMD Q1 2022 Revenue: $5.89B, YoY Change +70.89%
| Intel Q1 2022 Revenue: $18.35B, YoY Change -6.71%
| smugma wrote:
| "The original headline to this story mistakenly stated that it
| was the first time AMD had passed Intel in market cap. In fact,
| it happened before in Feb. 2022."
|
| So not really newsworthy?
| bhouston wrote:
| I think this may be the top out for AMD at least in terms of
| market share and revenue. The next gen of ARM and RISC-V is the
| future, especially if they as well can apply chipsets to their
| CPUs as well.
| DethNinja wrote:
| Does anyone think that all that backlash about Intel IME had an
| impact on this?
|
| I think Intel lost lots of confidence from domestic users due to
| accusations against IME.
|
| Not that AMD is any different but they somehow managed to not
| draw public attention to PSP.
| twblalock wrote:
| I don't think the IME had anything to do with it. The people
| who complain about it online in tech forums are a small but
| vocal minority.
|
| Intel's poor performance last quarter was mostly self-
| inflicted.
| philistine wrote:
| It is inconceivable to think that one criticized aspect of
| Intel's design that AMD has as well somehow tanked Intel.
|
| AMD's just got a much brighter future.
| gumby wrote:
| This could give Intel room to maneuver.
|
| I suspect they were going to have a quarterly loss, or close to,
| no matter what so jammed as much future/high potential loss into
| that single quarter as they could as well.
|
| Now that they appear not to have a dominant position (Samsung
| sells more chips! AMD is worth more!) this will blunt some
| opposition to the juicy handouts just passed by the US Congress
| and may cause some opposition to any attention the newly awake
| antitrust division might direct to them.
|
| Intel isn't in a near death position like Apple was, they are
| rather in a more extreme version of Microsoft's directionless
| drift and sag in the second half of the Balmer era. And like
| Microsoft, Intel has a lot of resources available to use to get
| back to the top of the dogpile. Like Microsoft they've been
| squandering those resources for years, but perhaps this symbolic
| milestone will cause them to finally feel the tang of fear.
|
| Otherwise they'll continue to float around on residual habits,
| like GE.
| georgeburdell wrote:
| I wouldn't ascribe this quarter's woes to some grand
| machinations. Intel's situation really does seem that bad and
| they're years from recovering (if they do)
| gumby wrote:
| Standard practice in a turnaround is that if a loss is
| unavoidable anyway, you might as well make it as bad as
| possible (i.e. jam future bad news into it).
|
| But as you point out I am not privy to Intel's actual
| practice here and haven't bothered to read the 10-Q.
| oumua_don17 wrote:
| >> as much future/high potential loss into that single quarter
| as they could as well
|
| But Pat mentioned in the earnings call that they expect the
| next quarter to be even worse and are expecting (but in reality
| `hoping`) that they see turnaround in the final quarter. So by
| this account, they need more than one quarter to jam the
| potential losses.
| NotZachari wrote:
| While I'll admit that Intel's made several missteps recently and
| AMD has closed in, the reality is that they pad their numbers
| using pipeline and microarchitecture tricks to get higher raw
| stats that don't translate to real-world performance. Intel's
| tends to be a bit more expensive for the same "tier" with lower
| listed performance numbers but better performance. That's because
| AMD has consistently done shit like using shorter pipelines and
| rampant pipeline flushing. They have used sacrificing cycles to
| get the raw benchmark numbers to justify someone "saving money
| for more power". Intel's made a lot of mistakes recently, but I
| trust their chips to perform at the price point they're sold at.
| A quality AMD processor or GPU performance-wise is equal in price
| to their counterparts in Intel and Nvidia.
|
| I'm not anti-AMD at all. I want competition in the marketplace,
| but their historical approach to this where they cut costs and
| use tricks to generate raw numbers makes it really hard to
| support them. "Consoles and gaming computers featuring them are
| selling like hotcakes!" Yeah because companies are looking to
| sell units at the highest profit margin.
|
| I think the elite tier of this competition is a solid one, and
| I'm constantly watching to see what each company's pushing out.
| That being said, I think it's widely known that Intel's products
| in their low to mid-tier offerings are superior.
| dralley wrote:
| I'm not a hardware engineer so I have to ask, how is using
| "shorter pipelines" supposed to be illegitimate? Just because
| Intel may do better at the workloads you have in mind, that
| doesn't mean that AMD's approach doesn't do better in other
| (legitimate) workloads.
|
| Pentium 4 and Bulldozer both had (very) long pipelines and look
| how they turned out. Long pipelines certainly doesn't
| fundamentally equal better real-world performance, short
| pipelines != better benchmarks. It depends on the combination
| of architectural decisions considered together, right?
|
| You're going to have to expand on this concept a bit to
| convince people that these design decisions are a deliberate
| attempt to cheat the benchmarks, throwing out lingo doesn't
| quite suffice.
| bekantan wrote:
| Intel was once known for its memory. Then it became known for its
| CPUs. I expect that they will pivot at least once more, this time
| to something which will supersede GPUs for ML workloads. This is,
| of course, very uncertain which is reflected in the size of my
| long position
| scrlk wrote:
| >Intel was once known for its memory. Then it became known for
| its CPUs
|
| As Andy Grove once succinctly put it: "Only the paranoid
| survive"
| oumua_don17 wrote:
| >> they will pivot at least once more,
|
| They most likely won't be a third time lucky. They had to pivot
| after their first 10nm delay but their monopoly in server CPU
| allowed them to keep pumping money despite manufacturing
| delays. Meanwhile, that gave AMD a chance to catch up which
| they not only did but outperformed them. One can claim that
| it's easy to say in hindsight, but that's the hallmark of great
| leadership which they haven't had since Grove's retirement.
|
| Now Intel have lost that money making division so much so that
| all the fanfare of regaining manufacturing leadership has been
| defused with the announcement of reduction of 4bn in capex and
| still a focus on shareholder dividend. Intel will need some
| financial engineering and a split of manufacturing and design
| shouldn't be surprising. And this won't be some smart timely
| pivot, but a forced split.
| huangc10 wrote:
| Remember the days when AMD was like $3/share and Intel was like
| crushing it. The world really has changed in the last decade.
| Smartcom5 wrote:
| It was $1.86/share Oct/Nov 2012, quite a rally if you ask me. I
| think it was still $1.66/share sometimes in '15.
|
| From Nov 2012 (that was after Bulldozer), it run to $153/share
| on 19th Nov '21 - that's 8255,38%!
|
| I remember vividly back in 2002 studying the newly established
| 'FT Deutschland' (FT's German Edition) when being in Germany,
| that FT Deutschland brought an profound article talking about
| AMD's imminent impact of success (and how it's going to hit
| INTC hard) with the then-new Thoroughbred-Athlons - I should've
| invested as I felt something was up.
| unethical_ban wrote:
| I bought at $5 and sold at 15 thinking I was so clever.
|
| Then I bought at 80 and held through 160, now it's at 96.
|
| I'm a long term bull on AMD, but I think the rocket left the
| atmosphere already. To me it's a blue chip. Intel nor AMD will
| ever go out of business, unless and until x86 itself dies and
| neither can pivot. AMD has a lock on consoles, it is the only
| competitor to Intel in x86, it basically _can 't_ go out of
| business.
| manquer wrote:
| With increasing ARM both on servers and laptops(Macs) x86
| itself may wane in marketshare .
| lelanthran wrote:
| > With increasing ARM both on servers and laptops(Macs) x86
| itself may wane in marketshare .
|
| Not a problem - they both (Intel and AMD) make ARM chips
| too, don't they?
| adam_arthur wrote:
| Cloud vendors have been increasingly pushing their own chips.
| It's hard to see AMD having any pricing power in the long
| run, unless their chips are significantly better than what
| big tech can create on their own
| unethical_ban wrote:
| The Gigacorps have done this, some of them. I have more
| interest in the ARM argument than in the "custom chip"
| argument, unless Amazon and co. decide to retail their
| processors.
|
| Consoles, most OEMs, and all non-gigacorps will be buying
| off-the-shelf processors.
| adam_arthur wrote:
| I'm pretty sure cloud and enterprise sales make up the
| bulk of their revenue and growth. Not consumer.
|
| That being said there's likely still a few years of
| runway left for their growth. Even if cloud vendors don't
| push their own chips aggressively, they can use it as
| leverage to cut into AMD margins.
|
| I don't see how ARM is an argument. AMD will easily be
| able to create competitive arm processors, there just
| wasn't a strong financial incentive to do it before
| StevePerkins wrote:
| I remember the first computer that I ever built (it was cheaper
| to do it yourself back at the dawn of globalization). I used an
| AMD 386 rather than an Intel 386. Simply for the youthful reasons
| that I liked AMD's logo better, and I've always tended to root
| for the underdog.
|
| I'm not much of a PC gamer, and so I haven't built a machine from
| scratch or thought much about individual components in decades.
| But there's a small flicker of my teenage self way down in there,
| pumping his fist and giving a cheer.
| jhenkens wrote:
| Different generation - my first build was an Athlon 64, and my
| only AMD build to date (of maybe 5 or 6 machines over 20
| years). Loved the struggle of being x64 when it was still so
| new to consumers.
| neogodless wrote:
| > root for the underdog
|
| This has been a lot of it for me.
|
| I didn't switch to AMD until the Athlon XP 1700+ came out. I've
| stuck with them for desktop builds, mostly, except a few budget
| "Intel Gxxx" cpus, while I stuck with Intel for laptop
| purchases until the Ryzen 4xxx chips came out.
|
| I've switched between Nvidia and ATI/AMD a lot over the years.
|
| If Intel becomes the underdog (against the AMD and Apple
| titans), I guess I'll have to hope they put out good products
| :)
| the8472 wrote:
| > I'm not much of a PC gamer, and so I haven't built a machine
| from scratch or thought much about individual components in
| decades.
|
| There's a grown-up version: build/videoediting/whatever-machine
| with a Threadripper ;)
| [deleted]
| nickserv wrote:
| I have a bit of that root for the underdog mentality too, but
| my support of AMD in the last few years has been due in large
| part for their Linux support.
|
| Not having to worry about 3D drivers working on a kernel update
| is such a nice thing.
|
| Of course, when I started, Linux was very much the underdog,
| and not on billions of devices.
| toast0 wrote:
| > my support of AMD in the last few years has been due in
| large part for their Linux support.
|
| > Not having to worry about 3D drivers working on a kernel
| update is such a nice thing.
|
| Intel does a pretty good job of kernel GPU drivers too, I
| thought? Their network card drivers aren't bad either. And
| they usually support FreeBSD as well as Linux, although
| sometimes Linux support comes much earlier than FreeBSD.
| dragontamer wrote:
| > I've always tended to root for the underdog.
|
| Time to start rooting for Intel now, lol.
|
| ------
|
| I've been rooting for Intel's AVX512 instruction set for some
| time, because I really think its a great technology. But with
| Zen3/4 on the way with rumored AVX512, and with Intel's most
| recent decisions to cut AVX512 from 12th gen Core-i7
| processors, its hard to find an advantage for Intel right now.
|
| Intel supports DDR5 a few months earlier than AMD, and Intel is
| doing some smart things with CXL and I/O space rather than CPU
| space. The new big.LITTLE design is interesting, but the loss
| of AVX512 is pretty big (and Intel really should fix that IMO).
| neogodless wrote:
| Just to clarify, Zen 3 has been out since November 2020. (Zen
| 3+ earlier this year.)
|
| Zen 4 is not yet formally announced (at least not the full
| technical details), so presumably that's what you mean.
|
| Intel's biggest remaining advantage is if you want a laptop
| with Thunderbolt. It should theoretically be available on AMD
| laptops, but I don't know if _any_ have become available yet.
|
| EDIT: See below, Zen 4 is _announced_ but not yet available,
| so performance and final details are pending (including
| models, performance, etc.)
| willis936 wrote:
| Zen 4 has been formally announced. Do you mean it has not
| launched?
|
| https://www.anandtech.com/show/17399/amd-
| ryzen-7000-announce...
| neogodless wrote:
| Yes, thanks for clarifying.
| briffle wrote:
| Mine was a cyrix "pentium compatible". I miss having 3 players
| in the game. I believe they got bought by Transmeta, back when
| Linus Torvalds was employed by them.
| deaddodo wrote:
| Cyrix was bought by Via (via National Semiconductor) and
| rolled into their Isaiah architecture along with Centaur's
| architecture. That was then used in Nano[1]. It is now being
| used in Chinese co-developed and fabbed x86 options[2].
|
| The rest of their technology was bought by AMD and used in
| it's MediaGX/Geode chips[3].
|
| 1 - https://en.wikipedia.org/wiki/VIA_Nano
|
| 2 - https://en.wikipedia.org/wiki/Zhaoxin
|
| 3 - https://en.wikipedia.org/wiki/Geode_(processor)#AMD_Geode
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