We’ve been covering AMD for quite some time now. It is an interesting player in the semiconductor space.AMD reported its earnings after market closed on Tuesday. Its earnings and revenue both beat street’s estimates in Q3. Normally, if a company had a good ER beat, its share price would go up due to the hype. That is not the case this time around. AMD saw a significantly drop of price around 15% at one point right after the ER. As of today, it was closed at $11.84. What’s going on with the drop? During the conference call, AMD gave a prediction on decline of its sales revenue by 14% to 18% for Q4, which does not bode well with investors expectations. Also, there are some other factors that scared the investors away. Intel’s newly launched CPU was one. Moreover, spectators are still not convinced that AMD would be able to sustain its market shares versus tough competitions from NVDA and INTEL. Its huge debt on balance sheet does not help the situation either. All that being said, we are still bullish on AMD for the long run. It is a company which is working on turning itself around from the worse period in pre-2014. Its revenue and earnings are both improved from year over year. Here is a small sample: (source:ST.)
New product lines are continue to roll out in 2018. We also believe that the revenue from data-centers are coming in later in the year as well. It is also doing a decent job on reducing debts. However, it is not going to be a smooth ride in the near future. The volatility is going to be high as it is still one of the most shorted stocks in tech. Think twice before you decide to jump in whereas there are other great blue chip stocks in tech:)
P.S. We have positions in the equity mentioned above. Also, other tickers will be covered in future posts.