火星投资狼
2021-04-20
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AMD: Still Great Prospects
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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":371330544,"tweetId":"371330544","gmtCreate":1618908881388,"gmtModify":1634289983397,"author":{"id":3564654698806900,"idStr":"3564654698806900","authorId":3564654698806900,"authorIdStr":"3564654698806900","name":"火星投资狼","avatar":"https://static.tigerbbs.com/e07a54590dfa2f7a0c7649fff90653d3","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":7,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":40,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p>Good, please comment and like !</p></body></html>","htmlText":"<html><head></head><body><p>Good, please comment and like !</p></body></html>","text":"Good, please comment and like !","highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":3,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/371330544","repostId":1134294783,"repostType":4,"repost":{"id":"1134294783","pubTimestamp":1618907741,"share":"https://www.laohu8.com/m/news/1134294783?lang=&edition=full","pubTime":"2021-04-20 16:35","market":"us","language":"en","title":"AMD: Still Great Prospects","url":"https://stock-news.laohu8.com/highlight/detail?id=1134294783","media":"seekingalpha","summary":"Summary\n\nAMD's share price has corrected in recent months after last year's rally and is now 15 perc","content":"<p><b>Summary</b></p>\n<ul>\n <li>AMD's share price has corrected in recent months after last year's rally and is now 15 percent below its all-time high. This correction was overdue.</li>\n <li>Looking ahead, I see further upside potential for shareholders, although the picture is no longer quite as promising as in recent years.</li>\n <li>The share price still needs some time to reach an appropriate valuation, which could be the case in two years.</li>\n <li>If the company manages to maintain its strong market positions and address the growing future markets with innovations and competitive products, long-term investors will find an investment that is currently not excessively overpriced.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/34b309ee8140622181fae14b04573fc3\" tg-width=\"1536\" tg-height=\"864\"><span>Photo by medwedsky/iStock via Getty Images</span></p>\n<p>AMD's (AMD) share price has corrected in recent months after last year's rally and is now 15 percent below its all-time high. From a technical point of view, such a reaction was long overdue. I would not be surprised if the correction is not yet completed and further price losses follow.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/1f437f50523873dfd9fd5e14c7c67206\" tg-width=\"635\" tg-height=\"403\"><span>Data by YCharts</span></p>\n<p>Furthermore, the last overriding rally has reduced the upside potential for investors massively. Just to remind you: The AMD share has risen by almost 900 percent after its latest longer consolidation from the end of 2016 to April 2018. However, sales have only just doubled since then. The price increase was nevertheless justified, as I have pointed out in several analyses in recent years. Thanks to CEO Lisa Su, AMD has turned into a highly innovative and profitable company with a very clean balance sheet. Looking ahead, I see further upside potential for shareholders, although the picture is no longer quite as promising as in recent years.</p>\n<p><b>Great prospects and only limited risks</b></p>\n<p>AMD has built up a considerable portfolio over the past few years, which helps the company to dominate several future markets at once. The markets for data centers, PCs, and gaming provide a total addressable market (TAM) of almost $80 billion. AMD covers these markets with its powerful processor families Ryzen (CDU/APU), Radeon (GPU for gaming, desktop, and mobile), plus EPYC/INSTINCT (CPU/GPU for data centers). AMD's growing market position is also reflected in the impressive sales development. Both segments have seen massive growth in recent years. The Computing & Graphics segment (CPU/GPU for desktop and notebook market) has even more than doubled its revenue since 2016.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e4033a3bd89e2ba316e1c07e74db3757\" tg-width=\"640\" tg-height=\"119\"><span>Revenue by segments: source: www.DividendStocks.Cash</span></p>\n<p>Even more outstanding, however, is the development of profitability. The expected gross margin of 47 percent for FY2021 would be another high point in the highly successful development of recent years.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/09ee6a33bea9e5d52050a8ce5884d3d1\" tg-width=\"640\" tg-height=\"242\"><span>Source: Investor relations</span></p>\n<p>Besides, AMD is net debt-free. The interest-bearing debt of just $2.5 billion is mostly offset by AMD's cash pile of $2.2 billion. If we compare this situation with 2015, when the debt ratio (interest-bearing) was 70 percent, it shows once again what an excellent job the CEO Lisa Su has done.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a4d6b281576709fa25d7c9b75007f687\" tg-width=\"640\" tg-height=\"247\"><span>Debt to total assets and amortization power, source: www.DividendStocks.Cash</span></p>\n<p><b>AMD's HPC business: Xilinx vs. Altera</b></p>\n<p>It will be exciting to see how AMD does in the high-performance computing market. The $35 billion acquisition of Xilinx should help AMD, especially in the market for reprogrammable chips (FPGAs). As I said before,</p>\n<blockquote>\n FPGAs have increasingly replaced high-end CPUs and Application Specific Integrated Circuits (ASICs). It is therefore not surprising that the market for FPGAs will grow extremely in the future. The market size was valued at USD 5 billion in 2014 and is expected to grow at a CAGR of 14% from 2017 to 2027.\n</blockquote>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8a8009445e87168efe89b04bd151ad88\" tg-width=\"640\" tg-height=\"381\"><span>Source: FPGA Market Share - Industry Size Forecast</span></p>\n<p>AMD will thus compete with Intel(NASDAQ:INTC)in another technology segment. 2019, Intel announced that it had begun shipments of the first Agilex FPGA, a product of the former Altera group that Intel acquired for $16.7 billion in 2015. Even though Intel was able to win Microsoft as a customer for Agilex, Xilinx was still ahead of Intel at this point. While Intel's Agilex FPGA from 2019 was still based on 10nm, Xilinx already used the 7nm \"versal\" architecture.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b5b5f3d48e360c42e156c64586347f9a\" tg-width=\"289\" tg-height=\"283\"><span>Source: Intel AGILEX inside</span></p>\n<p>In Xilinx, AMD snagged a company that had 2020 revenue of $3.16 billion and earnings of $793 million/$3.11 per share. By comparison, Intel's PSG (programmable semiconductors) segment generated revenues of just under $2 billion in 2020. Depending on the source, Xilinx has market shares of approximately 50 percent compared to Intel, with below 40 percent. Accordingly, AMD also becomes the market leader in this segment.</p>\n<p><b>AMD's server market and</b> <b>data center business</b></p>\n<p>The server market and the market for data centers will also be challenging. I see two risks here. Large customers for those processors, such as Amazon (AMZN), Google (GOOG) (GOOGL), Apple(NASDAQ:AAPL), and Microsoft (MSFT), can start producing their chips. Amazon has already made ARM processors for the AWS cloud (AWS Graviton). Apple is also considered a potential new server giant with its superior M1 processor. AMD has many customers. It would therefore not be a death sentence if the company lost individual customers.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/80002d5595e46c8beaf93811c535c97a\" tg-width=\"640\" tg-height=\"327\"><span>Source: Corporate presentation</span></p>\n<p>Nevertheless, increasing competition would not only squeeze margins but also increase the pressure to innovate. Both are good for the customers but not necessarily for AMD's shareholders. It will be interesting to see whether Nvidia(NASDAQ:NVDA)gets the acquisition from ARM approved. Nvidia has just released a roadmap for its new data center chip market. Nvidia's \"Grace\" CPU family is based on ARM architecture, so the ARM acquisition already casts the first shadow on the market, which AMD will certainly not appreciate.</p>\n<p>But that's not all. As it seems, even more players are coming into play. Qualcomm (QCOM) also tries to reduce its dependence on ARM. As I said in my last article, Qualcomm</p>\n<blockquote>\n put money on the table with its recent acquisition of startup Nuvia for $1.4 billion. Nuvia is supposed to combat the dependency on ARM CPUs with its own design. The acquisition could give Qualcomm a foothold in the growing server market, where Nuvia claims significant outperformance, with its Phoenix chip, compared to other chip vendors.\n</blockquote>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/92e6e39cf5adb30302deb0afaae1f52c\" tg-width=\"640\" tg-height=\"387\"><span>Source: Nuvia webpage</span></p>\n<p><b>Weighing the upside potential</b></p>\n<p>I already said in the introduction that the upside potential is different today than it was two years ago. The market has now priced the positive aspects into the share price and anticipated further earnings development. We have to take the recent historical valuation levels to consider AMD as reasonably valued. AMD has a P/E ratio of 56, an adjusted P/E ratio of 52, and a P/C of 106, which is in line with the average of the last few years. With this consideration, we would even have an annual upside potential of 25% until 2024 based on the expected earnings and cash flow figures.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5611a12684afe7987c4fe9ff8f0dc1aa\" tg-width=\"640\" tg-height=\"321\"><span>Fair value calculation, source: www.DividendStocks.Cash</span></p>\n<p>The sunny skies darken somewhat if we ground the multiples a bit and only use a P/E ratio of 30. Here, we see a short-term downside potential of 30%. Only in the long run will AMD grow back into a fair valuation. But even then, we only see an upside potential of 8 percent per year through 2024. To achieve an annual return of 10 percent or even more, AMD must exceed its own expectations or maintain the same annual growth rate in the years beyond 2024.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/0b709d2c2ed592f659b32c0a89b92127\" tg-width=\"640\" tg-height=\"321\"><span>Fair value calculation, source: www.DividendStocks.Cash</span></p>\n<p><b>Conclusion</b></p>\n<p>The outlook for AMD is good. However, investors should not expect an outstanding outperformance in the next few years. The share price still needs some time to reach a reasonable valuation. At the current share price, the AMD stock will already get this fair valuation in two years. Thus, if the company maintains its strong market positions and addresses the growing future markets with innovations and competitive products, long-term investors will find an investment that is currently not excessively overpriced.</p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>AMD: Still Great Prospects</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAMD: Still Great Prospects\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 16:35 GMT+8 <a href=https://seekingalpha.com/article/4419805-amd-stock-still-great-prospects><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nAMD's share price has corrected in recent months after last year's rally and is now 15 percent below its all-time high. This correction was overdue.\nLooking ahead, I see further upside ...</p>\n\n<a href=\"https://seekingalpha.com/article/4419805-amd-stock-still-great-prospects\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AMD":"美国超微公司"},"source_url":"https://seekingalpha.com/article/4419805-amd-stock-still-great-prospects","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1134294783","content_text":"Summary\n\nAMD's share price has corrected in recent months after last year's rally and is now 15 percent below its all-time high. This correction was overdue.\nLooking ahead, I see further upside potential for shareholders, although the picture is no longer quite as promising as in recent years.\nThe share price still needs some time to reach an appropriate valuation, which could be the case in two years.\nIf the company manages to maintain its strong market positions and address the growing future markets with innovations and competitive products, long-term investors will find an investment that is currently not excessively overpriced.\n\nPhoto by medwedsky/iStock via Getty Images\nAMD's (AMD) share price has corrected in recent months after last year's rally and is now 15 percent below its all-time high. From a technical point of view, such a reaction was long overdue. I would not be surprised if the correction is not yet completed and further price losses follow.\nData by YCharts\nFurthermore, the last overriding rally has reduced the upside potential for investors massively. Just to remind you: The AMD share has risen by almost 900 percent after its latest longer consolidation from the end of 2016 to April 2018. However, sales have only just doubled since then. The price increase was nevertheless justified, as I have pointed out in several analyses in recent years. Thanks to CEO Lisa Su, AMD has turned into a highly innovative and profitable company with a very clean balance sheet. Looking ahead, I see further upside potential for shareholders, although the picture is no longer quite as promising as in recent years.\nGreat prospects and only limited risks\nAMD has built up a considerable portfolio over the past few years, which helps the company to dominate several future markets at once. The markets for data centers, PCs, and gaming provide a total addressable market (TAM) of almost $80 billion. AMD covers these markets with its powerful processor families Ryzen (CDU/APU), Radeon (GPU for gaming, desktop, and mobile), plus EPYC/INSTINCT (CPU/GPU for data centers). AMD's growing market position is also reflected in the impressive sales development. Both segments have seen massive growth in recent years. The Computing & Graphics segment (CPU/GPU for desktop and notebook market) has even more than doubled its revenue since 2016.\nRevenue by segments: source: www.DividendStocks.Cash\nEven more outstanding, however, is the development of profitability. The expected gross margin of 47 percent for FY2021 would be another high point in the highly successful development of recent years.\nSource: Investor relations\nBesides, AMD is net debt-free. The interest-bearing debt of just $2.5 billion is mostly offset by AMD's cash pile of $2.2 billion. If we compare this situation with 2015, when the debt ratio (interest-bearing) was 70 percent, it shows once again what an excellent job the CEO Lisa Su has done.\nDebt to total assets and amortization power, source: www.DividendStocks.Cash\nAMD's HPC business: Xilinx vs. Altera\nIt will be exciting to see how AMD does in the high-performance computing market. The $35 billion acquisition of Xilinx should help AMD, especially in the market for reprogrammable chips (FPGAs). As I said before,\n\n FPGAs have increasingly replaced high-end CPUs and Application Specific Integrated Circuits (ASICs). It is therefore not surprising that the market for FPGAs will grow extremely in the future. The market size was valued at USD 5 billion in 2014 and is expected to grow at a CAGR of 14% from 2017 to 2027.\n\nSource: FPGA Market Share - Industry Size Forecast\nAMD will thus compete with Intel(NASDAQ:INTC)in another technology segment. 2019, Intel announced that it had begun shipments of the first Agilex FPGA, a product of the former Altera group that Intel acquired for $16.7 billion in 2015. Even though Intel was able to win Microsoft as a customer for Agilex, Xilinx was still ahead of Intel at this point. While Intel's Agilex FPGA from 2019 was still based on 10nm, Xilinx already used the 7nm \"versal\" architecture.\nSource: Intel AGILEX inside\nIn Xilinx, AMD snagged a company that had 2020 revenue of $3.16 billion and earnings of $793 million/$3.11 per share. By comparison, Intel's PSG (programmable semiconductors) segment generated revenues of just under $2 billion in 2020. Depending on the source, Xilinx has market shares of approximately 50 percent compared to Intel, with below 40 percent. Accordingly, AMD also becomes the market leader in this segment.\nAMD's server market and data center business\nThe server market and the market for data centers will also be challenging. I see two risks here. Large customers for those processors, such as Amazon (AMZN), Google (GOOG) (GOOGL), Apple(NASDAQ:AAPL), and Microsoft (MSFT), can start producing their chips. Amazon has already made ARM processors for the AWS cloud (AWS Graviton). Apple is also considered a potential new server giant with its superior M1 processor. AMD has many customers. It would therefore not be a death sentence if the company lost individual customers.\nSource: Corporate presentation\nNevertheless, increasing competition would not only squeeze margins but also increase the pressure to innovate. Both are good for the customers but not necessarily for AMD's shareholders. It will be interesting to see whether Nvidia(NASDAQ:NVDA)gets the acquisition from ARM approved. Nvidia has just released a roadmap for its new data center chip market. Nvidia's \"Grace\" CPU family is based on ARM architecture, so the ARM acquisition already casts the first shadow on the market, which AMD will certainly not appreciate.\nBut that's not all. As it seems, even more players are coming into play. Qualcomm (QCOM) also tries to reduce its dependence on ARM. As I said in my last article, Qualcomm\n\n put money on the table with its recent acquisition of startup Nuvia for $1.4 billion. Nuvia is supposed to combat the dependency on ARM CPUs with its own design. The acquisition could give Qualcomm a foothold in the growing server market, where Nuvia claims significant outperformance, with its Phoenix chip, compared to other chip vendors.\n\nSource: Nuvia webpage\nWeighing the upside potential\nI already said in the introduction that the upside potential is different today than it was two years ago. The market has now priced the positive aspects into the share price and anticipated further earnings development. We have to take the recent historical valuation levels to consider AMD as reasonably valued. AMD has a P/E ratio of 56, an adjusted P/E ratio of 52, and a P/C of 106, which is in line with the average of the last few years. With this consideration, we would even have an annual upside potential of 25% until 2024 based on the expected earnings and cash flow figures.\nFair value calculation, source: www.DividendStocks.Cash\nThe sunny skies darken somewhat if we ground the multiples a bit and only use a P/E ratio of 30. Here, we see a short-term downside potential of 30%. Only in the long run will AMD grow back into a fair valuation. But even then, we only see an upside potential of 8 percent per year through 2024. To achieve an annual return of 10 percent or even more, AMD must exceed its own expectations or maintain the same annual growth rate in the years beyond 2024.\nFair value calculation, source: www.DividendStocks.Cash\nConclusion\nThe outlook for AMD is good. However, investors should not expect an outstanding outperformance in the next few years. The share price still needs some time to reach a reasonable valuation. At the current share price, the AMD stock will already get this fair valuation in two years. Thus, if the company maintains its strong market positions and addresses the growing future markets with innovations and competitive products, long-term investors will find an investment that is currently not excessively overpriced.","news_type":1},"isVote":1,"tweetType":1,"viewCount":125,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":26,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/371330544"}
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