10 Reasons to Say No to AMD

Sometimes, the decision to buy or sell a stock is cut and dried. Other times, it can be a downright head-scratcher, as fellow Fool Anders Bylund contemplated last week.

Such is the plight for shareholders of Advanced Micro Devices (NYSE: AMD  ) after the microprocessor and graphics company reported strikingly better-than-anticipated earnings after the bell on Thursday. The company noted that its new Fusion line of chips has performed well, and its own aggressive guidance hinted at market-share gains in the netbook and notebook segment versus primary rival Intel (Nasdaq: INTC  ) .

Despite this bullishness, there are 10 distinct reasons you might be better off saying no to AMD at these levels rather than risk chasing this stock any higher.

  1. No consistency. AMD has always struggled to adapt to changing consumer demands and the cyclical nature of the personal-computing industry. It's always about the bottom line, and for AMD, which has lost money in 10 of the past 15 years, the bottom line is usually bleeding a deep shade of red.
  2. No market share. AMD holds roughly a 10% market share and runs a distant second to Intel. That doesn't exactly leave AMD in an advantageous position. From negotiating new deals to securing better margins for its processors, AMD tends to be left scrounging for scraps. It's been able to grab market share from Intel for only short periods of time over the past decade, so why are we to assume these new Fusion chips won't fade in demand the way AMD's previous technological advancements have?
  3. No margins. What victories AMD has been able to claim over the recent years have occurred in the lower end of the personal-computing market. Dell (Nasdaq: DELL  ) , Asus, and Acer are keeping AMD busy producing chips, but the quantity is hardly enough to justify the shrinking margins. Comparing the recent six-month results against the year-ago period, we see that gross margins fell to 44% from 46% and average selling prices have weakened.
  4. No graphics momentum. Sales at AMD's graphics division are shrinking rapidly, down 17% from the year-ago period. AMD blamed the drop on seasonal weakness and lower discrete mobile-unit shipments, but to me it appears clear that NVIDIA (Nasdaq: NVDA  ) and Intel are stealing the show. AMD is shuffling most of its resources to researching and developing the fusion chips, but it's at the expense of the graphics segment.
  5. No consumer demand. Sales of AMD's new fusion chips were strong, but its foundation-computing and server-related business weakened in developed markets. Consumers are simply not spending as they were before the recession, and it's hurting AMD on both a revenue and margin front. Price-conscious consumers are purchasing lower-priced PCs, dragging down margins.
  6. No foresight. Although investors were surprised that AMD offered revenue-growth guidance of approximately 10% for the third quarter, it may be less valuable than perceived. Considering that what little guidance AMD has given over the years has been way off the mark, shareholders should take any concrete optimism from AMD with a grain of salt.
  7. No CEO. Since the resignation of former AMD CEO Dirk Meyer in January, the company has been sailing without a captain, and it has shareholders concerned. Four executives -- notably, Apple (Nasdaq: AAPL  ) COO Tim Cook, EMC (NYSE: EMC  ) COO Pat Gelsinger, and Oracle (Nasdaq: ORCL  ) co-president Mark Hurd -- have turned down the job offer. We know AMD wants the right CEO, but the question is, does anyone actually want this job?
  8. No leverage. AMD, and most of the microprocessor sector, has little pricing power, since the chip market has become predominantly commoditized. The company touted strength across its Fusion lineup in the second quarter, but its computing and server products saw a drop in average selling price. The company can cut costs only so far before a weakness in margins and a lack of real revenue growth become apparent.
  9. No dividend. AMD has a hard enough time remaining profitable and controlling expenses on its debt-laden balance sheet. It shouldn't be a surprise that unlike rival Intel, it doesn't pay out a quarterly dividend. Whereas Intel's dividend has more than doubled since 2005, AMD shareholders continue to see no extra perks for owning its shares.
  10. No confidence. In the second half of June, short-sellers increased their stake in AMD by 21%. Currently, more than 83 million shares of AMD stock are sold short -- equating to 14.4% of the float. Although large short interest doesn't always equate to a poor investment, it's just another red flag alluding to the potential overvaluation of AMD's stock.

In sum, AMD hasn't shown any consistency on the earnings front to warrant throwing any hard-earned investment money at it. The company lacks a CEO, a dividend, and a real growth driver, but it has plenty of excuses, losses, and short shares held by traders. You might be doing yourself a real favor by saying no to AMD at these levels.

Would you buy AMD? Yes? No? Maybe so? Share your thoughts in the comments section below, and consider adding Advanced Micro Devices to your watchlist to keep up on the latest news in the semiconductor sector.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong  The Motley Fool owns shares of Apple, EMC, Oracle, and Intel and has purchased calls on Intel. Motley Fool newsletter services have recommended buying shares of Apple, Intel, and NVIDIA, as well as creating a bull call spread in Apple, a diagonal calls position in Intel, and writing puts on NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that’s cutting-edge but child-proof.


Read/Post Comments (41) | Recommend This Article (14)

Comments from our Foolish Readers

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  • Report this Comment On July 26, 2011, at 10:35 PM, austec wrote:

    Anders Bylund needs to come out and take credit for this article. C'mon Anders! Come out and admit you are still upset about selling early!

  • Report this Comment On July 26, 2011, at 11:14 PM, jkubinak1339 wrote:

    This article is so far off base its absurd

    1) AMD sees sell through and market gains going forward with Llano and brazos

    2) They have been producing good cash flow and NI

    3) next generation Llano will have bulldozer core with high end discrete graphics - intel will have their useless graphics approach

    4) new server Interlagos server chips first upgrade in years that are drop in available to opteron boards - is being adopted by all major partners.

    CEO or no CEO AMD has a competitive advantage for the next few years - Intel will end up gobbling up nvidia or amd - they miss stepped in not delivering a fusion product.

  • Report this Comment On July 26, 2011, at 11:36 PM, BuyemHoldem wrote:

    This site is particularly bigoted toward the stocks they (or their friends) own. Why don't you guys just take out ADs to pitch INTC? I have made significantly more $$$ on AMD over the last 2 years than I would have had if I had bought INTC in 2008Q4... and I plan on making more.

    If the SEC in their infinite wisdom brings back the uptick rule the short position will change drastically.

  • Report this Comment On July 26, 2011, at 11:45 PM, TEBuddy wrote:

    There is a reason AMDs Opterons are in a lot of the top supercomputers, because they actually are more efficient at doing work and it save the people millions of dollars.

    AMD has started a pretty consistent streak of making money from non-GAAP accounting, and the losses from GF werent really losses for AMD.

    AMD has made a few mistakes, they have botched a few design updates, but they have now a real winner. AMD makes the best APUs, the best graphics cards, the best chipsets, and is the only complete high performance system provider.

    GPU sales are down because the processor side of the house is stealing their business with APUs. APUs that are as good as discrete graphics. As you point out the graphics team has spent a lot of effort on APUs and the chipsets, but all those sales are going into the processor bin.

    Any way you look at it AMD's future prospects are positive. They have an impressive lineup right now, are releasing more new designs this quarter, they may actually hire a CEO, and market share can only go up from here.

  • Report this Comment On July 26, 2011, at 11:48 PM, TMFUltraLong wrote:

    austec,

    I can assure you I am not Anders.... but that did make me laugh.

    jkubinak,

    The issue with AMD is it can't stay consistent on any of its technological innovations. Give it 2-3 quarters and ASP's will begin to fall again and what market share it has gained it'll start giving right back to Intel. AMD has no history of being consistent other than in the loss column.

    BuyemHoldem,

    I don't currently have any positions in any of the companies mentioned in this article....so I really don't have a reason to "pump" Intel, other than the numbers which seem to support my opinion that Intel > AMD.

    TMFUltraLong

  • Report this Comment On July 26, 2011, at 11:51 PM, TMFUltraLong wrote:

    TEBuddy,

    I've been waiting a decade for AMD's market share to go up... it instead just floats between 10%-12% as the company vacillates between turning a one profit for every two years of losses.

    The Fusion line of chips clearly has some momentum behind it, but look at the source where the info is coming from... AMD itself. Take a step back and you'll see another hopefully game-changing product. The prior products have all been "botched" as you've said. History says that "botching" things is in its blood.

    TMFUltraLong

  • Report this Comment On July 27, 2011, at 12:23 AM, whatisupthere wrote:

    Seems like you listed 10 feelings that explain why AMD is currently so undervalued. Listing only negatives doesn't give you a clear picture of the company. I could give you 100 reasons why AMD is a great stock to own.

  • Report this Comment On July 27, 2011, at 12:33 AM, TMFUltraLong wrote:

    whatisupthere,

    The comment box has a 10,000 character limit, but the floor is yours - let's hear 'em!

    TMFUltraLong

  • Report this Comment On July 27, 2011, at 1:15 AM, heflys20 wrote:

    Of course AMD's graphics division is down %17 from a year ago. They haven't released anything substantial in about a year's time! Unless you consider bottom feeders, and ridiculously expensive beasts (6990) the primary bread winners.

    Hell, even Nvidia's sales are down. Did you look at the link you provided to their NASDAQ? But that's nothing to the devastation they endured in profits in 2010. Not to mention the $1 bill that Intel recently slapped in their palms. But, meh.....

    Furthermore, with the impending release of BD, Southern Isles, and the recent success of Llano....What makes you think things are going to get worse for AMD? LOL.

  • Report this Comment On July 27, 2011, at 1:47 AM, TMFUltraLong wrote:

    heflys20,

    That's the point here, can things actually get any worse for AMD? Outside of its fusion line of chips, it has nothing going for it. Everything for AMD is "coming" or "the next big thing." It never lives up to the hype and thus is why it sits at 10% market share... still.

    TMFUltraLong

  • Report this Comment On July 27, 2011, at 1:52 AM, heflys20 wrote:

    Never lives up to the hype? Am I mistaken that AMD's GPU division surpassed Nvidia's in overall shipments in 2010? Something unthinkable at one time? How is that "not living up to the hype?"

  • Report this Comment On July 27, 2011, at 2:06 AM, TMFUltraLong wrote:

    heflys,

    AMD has shown flash-in-the-pan success, but never anything long-lasting. Give it a few more quarters....I'd much rather have NVIDIA sitting in my personal portfolio than AMD.

    TMFUltraLong

  • Report this Comment On July 27, 2011, at 3:46 AM, dukenu wrote:

    Some things to consider: 1. Market share is only 10-12% now, means there is room for growth and profit 2.Next generation of Xbox will use amd's radeon direct X11 gpu 3. The decline in desktop, discrete graphics card computers means business for the laptop and tablet market (where amd's apu chip is stellar) will only help amd 4. it took a while, but amd's aquisition of ati is finally paying dividends, intel and nvidia cannot deliver the efficiency/graphics power combination of fusion chips (adding a discrete graphics card means more watts) 5. Bulldozer core will enhance amd's apu performance within the next 6months, adding momentum to the stocks price 6. The bulldozer core based Interlagos chip for servers is about to be released--i predict it will be a success, giving amd some market share in that segment 7. Part of amd's problems in the past stemmed from unfair tactics from its rival, a lawsuit made that dirty little problem better 8. The upcoming release of the low power z series apu will prove its worth in the tablet space, where the integrated gpu is going to really make a difference for tablet users doing graphic intensive things like flash video and high def movie viewing 9 When windows8 comes out next year, amd's apu is going to power that os on tablets the best 10. Past performance is no guarantee of future success, in this case that means amd's past mistakes don't amount to concluding they are going to drop the ball again.

  • Report this Comment On July 27, 2011, at 7:47 AM, rav55 wrote:

    The biggest reason AMD lost money, market share and margins over the 10-15 years is because INTEL was a CRIMINAL corporation. They cheated the consumer at every turn.

    The $1.5 billion the paid to AMD was far to little.

  • Report this Comment On July 27, 2011, at 8:50 AM, rav55 wrote:

    It's interesting that when ever AMD starts to climb, The Fool starts dumping on the stock. Whats happened lost a little money on the last short squeeze?

  • Report this Comment On July 27, 2011, at 9:44 AM, aprairie wrote:

    Hi Sean,

    I work at AMD and wanted to point out a few issues with your analysis (although the other comments are doing a good job as well). Would have emailed you directly, but can’t find your info on the site. In the future, feel free to connect with me if you want to talk through things and get our perspective before writing.

    • No market share. AMD holds roughly a 10% market share and runs a distant second to Intel.

    1. Per Mercury Research Q2 data released yesterday, we are actually 19.4% of the x86 CPU units shipped last quarter.

    • No margins. Comparing the recent six-month results against the year-ago period, we see that gross margins fell to 44% from 46% and average selling prices have weakened.

    1. Non-GAAP gross margin is actually up from year ago period. You should use the non-GAAP number as our Q110 gross margin number included a benefit of $69M related to inventory adjustments resulting from deconsolidating GLOBALFOUNDRIES. This accounting treatment represented 4 percentage points of GAAP gross margin in Q110.

    • No graphics momentum. AMD is shuffling most of its resources to researching and developing the fusion chips, but it's at the expense of the graphics segment.

    1. We shipped a record number of DirectX11 graphics engines in the quarter thanks to strength of our APUs. We aren’t “shuffling resources to R&D for Fusion”, we are making sure we are leveraging our strong graphics IP to deliver differentiated APUs. This is the business strategy, and as we stated on the call it is a beneficial trend for us to sell more APUs vs. discrete low-end CPUs and GPUs. Also, the world’s fastest desktop and mobile GPUs. We also marked record revenue and unit shipments for the professional graphics space in Q2. Lastly, Nintendo announced in June that they are going to (again) use our graphics technology in the next-generation Wii console they bring to market next year. Our graphics technology is in 2 of the 3 current generation game consoles, representing more than 140 million consoles sitting in homes around the world that use our graphics technology.

    • No consumer demand. Consumers are simply not spending as they were before the recession, and it's hurting AMD on both a revenue and margin front. Price-conscious consumers are purchasing lower-priced PCs, dragging down margins.

    1. Again, our margins are up. Plus, if you look at our product strategy with our low-power APU (E-series, codenamed “Brazos”) we followed a deliberate path of developing an extremely small APU that could return good margin on lower ASPs. As we stated on the earnings call, our E-series APUs for sub-$500 PCs are margin accretive.

    • No CEO. Four executives -- notably, Apple (Nasdaq: AAPL ) COO Tim Cook, EMC (NYSE: EMC ) COO Pat Gelsinger, and Oracle (Nasdaq: ORCL ) co-president Mark Hurd -- have turned down the job offer.

    1. Those four folks reportedly been contacted but were not interested, but you are reporting it as fact. You are also painting it as if these four were final candidates who said no at the last stage of an interview process. Again, we have never said that and neither have they so not sure it is right to report this as a clear cut fact. As we said on the earnings conference call, the search remains a priority and the board is pleased with the candidates they are seeing.

    • No leverage….since the chip market has become predominantly commoditized. The company touted strength across its Fusion lineup in the second quarter, but its computing and server products saw a drop in average selling price. The company can cut costs only so far before a weakness in margins and a lack of real revenue growth become apparent.

    1. Again, our margins increased and we have a strategy with our low-power APUs for sub-$500 PCs to drive a lower ASP APU into market that is margin accretive.

    You close saying we lack a real growth driver. We’d argue Fusion is our growth driver. Our E-series APU is one of the fastest ramping products in our history, and the A-series APU we launched in June is looking like it will ramp even faster. APUs are a differentiated product for us that we believe is better suited to meet what modern PC users want to do with their PC.

    Thanks-

    Drew

  • Report this Comment On July 27, 2011, at 10:32 AM, FuriousFusion wrote:

    So easy to say anything nowadays ... if the other guy is allowed to monopolize - how much would the consumer has to suffer ?

  • Report this Comment On July 27, 2011, at 11:24 AM, WunMoshen wrote:

    I wear the hat of the consumer & technician. Im not bias or against Intel or AMD I own both! It makes my portfolio look interesting to people who dont invest lol

    I bought shares of AMD for $4.00

    (right before the intel settlement) and the value shot up to like $10 per share. I laughed at all the people\analyst\& wanna be Jim cramers who doubted AMD. I was fool (no pun intended) I should have sold it right there because I can not remember the last time I have seen AMD at $10 per share. But I am optimistic I think about the Athlon64 3200+ and I say to myself anything is possible.

    Ive own & serviced several AMD & Intel machines and the response is always the same. <smiles at intel machines> <frowns at AMD Machine> if you go on ebay to sell a computer you make more money selling a current Intel machine than you would selling a AMD Machine. Even the ebayers have a established value on AMD or ATI products.

    The point I'm trying to make is, If you are on the outside looking in and you happen to read this article it is very believable even if it is not 100 percent true.

    I agree no one should print false info but if the the same things was to be said about Intel, I think it would be more people commenting in Intel's defense than the few of you who are commenting on AMD's defense, the proof is visible with Intel.

    Again I am not bias towards any company I look forward to new tech from AMD such as a graphics card that can give NVIDIA a run for its money.

    A message to Sean: I am glad you spoke out because like I said before, if you are on the outside looking in and come across this article, its a wrap! So thanks for the insight.

    sorry for the long comment please dont ridicule me.

  • Report this Comment On July 27, 2011, at 12:44 PM, RossPerot2011 wrote:

    Easy there Drew no one wants to steal your wheaties. It is what it is...or you can just discount it like you do a Benchmark that doesn't meet your needs any longer...

  • Report this Comment On July 27, 2011, at 12:46 PM, libra4us wrote:

    Everyone has his/her own view.

    Just a reminder: Sound products may not always generate good/great business and profit for:

    1) User don't see the benefits of the products when they are buying. AMD is terrible in this. Its CMO's comment is that educating users is up to POS, not AMD!!!

    2) How many applications truely leverage the architecture of AMD APUs?

    3) Is Intel still choking AMD? AMD64 is a fact.

  • Report this Comment On July 27, 2011, at 1:01 PM, libra4us wrote:

    Intel, AMD and Nvidia all are great company that have their own various great technologies.

    Are we discussing technologies or investments?

    For investments, look forward and calmly evaluate which one will have the greatest potential and generate the highest ROI. Keep your head cool. Emotion will cost you!!!

  • Report this Comment On July 27, 2011, at 1:05 PM, TEBuddy wrote:

    The author has a negative opinion of AMD and is not accepting the information being providing, but refuting it with generalizations. I will admit AMD did drop the ball in the past, I sold AMD stock when it hit $10, because I expected they couldnt execute well enough to maintain that. I bought in at $2 because I had faith and sold at $10, but I bought back in at an average of $7 in recent past, because I believe again. Its going to net me 100% gains by the end of 2012.

    Drew actually responded with what a PR firm might publish, thats pretty much solid.

    AMD's prospect are not just theoretical like it seems, the next big thing is not just coming. It is here! Have you seen the Llano vs Sandybridge demos! Llano is going to be a HUGE hit in notebooks of all sizes, as well as budget desktops for businesses and the Government (who btw is not allowed to use biased opinion when buying a million PCs for cubicles). I own a Brazos APU ultra-portable notebook, it works great. I also own an Intel C2D Thinkpad, and I like it too. I also own a dual processor Athlon MP system that is 10 years old and still is very quick and relevant today, except it eats too much juice so it needs a Bulldozer refresh.

    And Bulldozer is on the verge, for the high performance desktops and will further refine the APU lineup from the bottom up. Intel is going to have a hard timing ticking and tocking their way to the same performance in mobile.

    Global Foundries will be a manufacturing equalizer soon, with them spending all the capital for bleeding edge foundry technology. AMD's negotiations to only pay for useable product is really nice since taping out on a new process can take many iterations to get right at any foundry. Also, AMD no longer has to pay Intel royalties, as part of the settlement, and they share eachothers patents, because Intel needs AMD's designs to make their stuff work.

  • Report this Comment On July 27, 2011, at 1:21 PM, pryan37bb wrote:

    Wow, AMD's fanboys are almost as fervent of SIRI. After holding AMD for about a year of nothing but pain as it fell below $6, I got out when it came back up to $9 and never looked back. David is good for trades only; if you want an investment, go with Goliath.

  • Report this Comment On July 27, 2011, at 1:21 PM, pryan37bb wrote:

    (*as fervent as those of SIRI)

  • Report this Comment On July 27, 2011, at 1:38 PM, RossPerot2011 wrote:

    All I can say talk is cheap since AMD has not been consistant in...well the market share says it all. Prove it Marty S.! Oh! sorry he's not a big fan anymore either

    40+ years head to head with Intel. I know they are bad boys and all. So are Coke or Pepsi but they really compete because people made a choice for one or the other. Is AMD tired of being Squirt yet?

  • Report this Comment On July 27, 2011, at 2:15 PM, heflys20 wrote:

    Funny how if you disagree with the article, you must be a fanboy. I love the logic.

  • Report this Comment On July 27, 2011, at 5:13 PM, mtechac wrote:

    Only a Royal Fool can infer that AMD is not a good investment at this time. I think Alex Guana genes must be more spread in the investment community that what was thought..

    This is another guy who lives in Pluto, or is a guy making a lot of money for him and his fools by misleading investors..

    Past results do not imply future results if the company has no issues anymore.. All the points above are obsoleted and ignorant of any new events.

    Just one example of the complete garbage that this article contains.

    AMD has created the first true x64 APU, which contains good graphics capabilities. That is no more need for a discrete graphics cards.

    The latter means that NVIDIA does not have a market to sell on all those systems with an APU, because they are not needed any more. And if you put a GPU, then you want an AMD GPU so that it can synergize with the APU GPU for extra performance.

    This means AMD's APU's, which are more profitable, eat the sells of lower profit AMD discrete GPU's. For NVIDIA, they don't have an APU, so for them it is a complete lost.

    Intel.. They don't have real GPU's, so they are not in the picture. Sandy and Ivy Bridge are toys and they need NVIDIA GPU's or AMD GPU's to make a decent system.

    It is ajoke to compare Intel Sandy Bridge systems to AMD systems, when the the Intel systems have an AMD GPU install on them (or an NVIDIA). That just shows that Intel is completely deficient in the high end GPU's, and they are in trouble because Larrabee showed that they don't have the technology and experience to build high end GPU's and Crossfire/SLI technology.

    Like the story of the 2 guys and the bear, where the guy put his sneakers to out run the other guy and not out ran the bear, in the same way, AMD has it's APU, and Intel does not, so the freaking bear is going to get Intel which is too fat to ran and doesn't have the APU/GPU technology to compete.

    In one word, CPU's are dinosaur technology now.

  • Report this Comment On July 27, 2011, at 5:36 PM, RossPerot2011 wrote:
  • Report this Comment On July 27, 2011, at 7:11 PM, heflys20 wrote:

    Yeah it is, since it wasn't an epic fail like previous attempts. That link is a nice reminder though.

  • Report this Comment On July 27, 2011, at 7:33 PM, whatisupthere wrote:

    I don’t think its smart to only point out negatives. AMD products have only been updated in past 7 years. This year they have been completely redesigned.

    Here are a few positives about AMD chips.

    1) Computer manufactures seem to be happy with Llano. In the past fewer models were made with amd chips. For example HP currently has one E and one A series AMD laptop on their site. They are working on 10 additional AMD Llano laptops in both pavilion and probook series. These will be on the market shortly. HUGE IMPROVEMT

    2) Microsoft soon to release C++ with massive parallel processing. This is BIG for GPGPU computing. This will make it much easier to write programs that use GPU. This benefits AMD.

    3) Combining GPU and CPU will allow lower latency GPU computing. Getting data to and from an external GPU has been a major bottleneck in GPU computing. (I myself wrote a program using GPU for calculations several years ago)

    4) Bobcat faster in X86 and graphics vs atom. Sales are good

    5) Only AMD can provide x86 and modern graphics on a chip. Adding a 2nd gpu in a laptop kills battery life and makes laptops HOT in temperature.

    6) Llano chips finally allow AMD laptops to provide good battery life.

    7) Intel is years behind in GPU technology.

    8) 16 core bulldozer this year should improve server sales. It is replacing an outdated technology (phenon, athlon type cores)

    9) 20 core bulldozers servers next year

    10) 8 core bulldozer desktops should improve desktop sales. It is replacing an outdated technology (phenon, athlon type cores)

    11) 10 core bulldozer desktops next year

    12) Bulldozers cpus will allow more cores per area due to shared resources.

    13) AMD chips going into tablets. MSI for example is making win 7 tablet. These current chips are not even tablet optimized chips. Tablet optimized chips will be out next year and use < ½ the power.

    14) Amd will provide gpu for nintendo. Probably for future sony playstation and xbox.

    15) Apple switched from NVIDIA to AMD Graphics.

    16) AMD will likely gain market share in GPUs from NVIDIA especially since they are likely to reach 28 nm before NVIDIA.

    17) INTEL will have a harder time bribing companies not to use AMD chips after the 1.5 billion.

    18) Larrabee failed

    19) INTEL advertisements recently have focused consumer attention to mobile graphics performance. Now that Llano is out AMD has a chip that is 2-4 times > intel 2000/3000 in speed

    20) Direct X 11. Intel doesn’t have it. Not only for games. Also for GPGPU.

    21) Good reviews for new fusion chips.

    I only had time to write this short list. sorry

  • Report this Comment On July 28, 2011, at 12:11 AM, TEBuddy wrote:

    OMG, yes the AMD APU is original, why even bring up that former crap from Intel, it was no where near the same thing. It was a low performance embedded application using someone else's GPU IP. AND if you look back AMD was pumping out production mobile SOCs well before that with AMD Geode. The AMD Geode is probably the previously most successful integrated processor SoC, which can still be purchased, and powers the non-profit One Laptop Per Child initiative, which crooked Intel decided to jump on the board, throw a wrench into the whole works and then instead compete against the non-profit. Wondeful of Intel to use all of those contacts from OLPC to pawn off its wonderful new response to AMD's Geode.

    Again, these mobile SoC's are nowhere near to the same thing as todays AMD APUs, other than the concept. There are already tons of "inegrated SoCs out there from other companies as well, ARM licenses all the IP necessary to throw one together lickedy split, been there done that.

  • Report this Comment On July 28, 2011, at 8:56 AM, rav55 wrote:

    @RossPerot2011

    It's not about originality but rather success. AMD succeeded where Intel failed miserably, twice. Timna and Larrabee were both junk.

    Regarding Timna.

    TIMNA failed miserably as did Intel's next graphic's SOC Larrabee.

    S3 graphics wasn't a third place contender with 5% market share becasue it was a good chip. S3 sucked that's why VIA bought them so cheap. Gee whiz VIA now there's a contender.

    Timna was being built on Pentium II which at they time was beening pounded by AMD Athlon a much more superior cpu.

    All Intel showed was failure. In fact Sandy Bridge graphics is laughably poor.

  • Report this Comment On July 28, 2011, at 9:02 AM, rav55 wrote:

    No Graphics momentum?? nVidia stealing the show? Are you blind?

    A one year old Radeon core is shipping with EVERY FUSION APU!! That has completely blown out the mid-pricepoint market. That market is the mass market and without it no new GPU designs get funded. nVida lost that market to Fusion and Sandy Bridge, AMD simply burns the next high performance core on the next refresh APU design.

    AMD needs to provide some accounting for the Radeon cores sold on FUSION apu's as they will start counting in the many millions.

    nVidia GTX 590 was all smoke and no mirrors.

  • Report this Comment On July 28, 2011, at 1:43 PM, gentpete wrote:

    Sean is an %%$%^^% - fill in the blank.

  • Report this Comment On July 28, 2011, at 3:22 PM, libra4us wrote:

    Again, the key to the success in business is how to let AVERAGE users know that getting a APU-based product is a better deal for their usage of the products, not for technical specifications.

  • Report this Comment On July 30, 2011, at 11:08 PM, zzzxtreme wrote:

    i buy intel when i build a PC

    but I don't agree with saying "AMD has no consistency". AM2/AM3 platform is great for consumers

    hardcore gamers mostly choose AMD graphic chipsets

  • Report this Comment On July 31, 2011, at 11:12 PM, telegraham4u wrote:

    The only thing I can add to this great exchange (much appreciated from a non technical investor) is that the 10th reason not to invest in AMD is actually a bullish indicator in AMD's favor. A 14% short interest positions the stock for panic buying should there be one more material positive announcement.

  • Report this Comment On August 01, 2011, at 2:02 PM, elan19 wrote:

    Though I haven't been considering AMD for investment, I just spent a bunch of time researching the latest AMD and Intel chips because I wanted to buy a system ideal for both home use and HTPC. I settled on buying a laptop based on Intel's Sandy Bridge chip: i5 2410m, which includes the HD3000 graphics.

    I'm amazed that there are no links to any benchmark data in this long conversational thread, so I'll provide them. They will refute the statement:

    5) Only AMD can provide x86 and modern graphics on a chip. Adding a 2nd gpu in a laptop kills battery life and makes laptops HOT in temperature.

    In short, Intel's HD3000 integrated graphics in Sandy Bridge is plenty good enough to support mainstream computers, and can even (barely) play very old or low end games. The integrated graphics are not as good as the integrated graphics you get from the Llano platform. But that will only matter to a small number of people who have a lot of old or low end games. Someone who wants modern games with all the bells and whistles will get a discrete graphics card anyway. Links:

    http://www.anandtech.com/show/4444/amd-llano-notebook-review...

    http://www.anandtech.com/show/4479/amd-a83850-an-htpc-perspe...

    http://www.tomshardware.com/reviews/amd-a8-3850-llano,2975-1...

    If you read these reviews, you'll see that they're mixed, but the demanding gamer perspective often creeps in. For example, in the Tom's Hardware conclusion, the reviewer prefers the reviewed Lllan chip but then says that "Take 3D out of the picture and Sandy Bridge is superior." Well - how many people use 3D? I certainly don't.

    There's a tiny AMD thread started where I just piped in with detailed comments about Llano vs Sandy Bridge here:

    http://boards.fool.com/llano-has-now-been-out-and-in-the-wil...

    I conclude that Sandy Bridge is going to be better than Lllano for most mainstream users, based on my experiences of just having shopped for and ordered a system. Towards the end of my post, I note that for a laptop:

    i5 2410m systems start at around $600 (that's what I just got - a Lenovo thinkpad Edge e520)

    A somewhat less capable but still impressive laptop:

    i3 2120m systems start at around $450

    So Llano based systems are going to have to be lower priced in order to compete, which I suspect means pretty low margins for AMD.

    Llano chips are very very good. The problem is that Sandy Bridge is better for most mainstream uses, so far as I can tell.

    To be fair, I did find that the AMD's E-350 "Brazos" systems are far more capable than Intel's Atom/Ion Based systems for only a small additional cost. So I guess there's room for AMD somewhere in between $300 netbooks and $450 Sandy Bridge-based notebooks.

    I guess what I don't know is whether consumers will realize just how great these $450 i3 2120m notebooks are and be willing to pay the $50 to $100 extra to get them. The alphabet soup of chip technologies out there can't be easy for a regular consumer to sort through.

  • Report this Comment On August 01, 2011, at 3:59 PM, elan19 wrote:

    typo: meant to say i3 2310m (NOT i3 2120m)

  • Report this Comment On August 03, 2011, at 1:46 AM, egenesis wrote:

    Bad analysis UltraLong. Many of your points like no market share, no consistency, no margins, no dividend are due to the unfair competition from Intel up until recently and others like no consumer demand are just as valid for the competition. It will take more than a couple of years to overcome decades of anticompetitive market conditions. Awhile ago AMD could have been criticized for overpaying for ATI which was Nvidia's main graphics competitor, but now that they have integrated the technology, its about to pay off. A fair criticism for AMD would be that they have not foreseen the explosion in tablets but neither has Intel. Theyre both scrambling to counter ARM in that market. In fact AMD board should be commended for ousting the CEO who missed this major shift and was intent on ignoring it further, and the new CEO will certainly be more proactive. The real question going forward is will AMD fare well in this three horse race. Oh and where is the mea culpa in response to AMD developer's post...or did you swallow your tongue....cause until then you were chirping back pretty merrily...:-)

  • Report this Comment On August 03, 2011, at 4:49 AM, Medallish wrote:

    This has to be one of the most piss poor articles I've ever read about any tech company, it's all based in feelings, no facts or anything, as aprarie pointed out you grossly missed AMD's market share, but more disturbingly how's a low market share a reason to say No to AMD? The whole thing just smacks of some 15 year old kid who read a couple of recent headlines, didn't do any research and wrote this complete nonsense!

    If Phenom hadn't failed in performance and the TLB error, we wouldn't have seen any inconsistencies, if it had beaten Core 2 Duo, AMD would still be on a rise since 2003. But here's the thing, AMD didn't think, let's fail this year, let's make something that can't compete, and as we can see on Phenom II, there was a lot of interesting in the Phenom architecture.

    A lot of the reasons you state are good reasons to say yes to AMD, we want both companies, with just Intel we wouldn't have IMC, APU's etc. And I love that all these intel fanboys will keep talking about Timna, an over decade old failed architecture that never was released. You may think that Intel is the only player on the market, but the fact is Intel needs AMD so they can license the AMD64 extension of x86, and AMD need Intel, this idiotic fanboy call for AMD to stop excisting is so moronic and counter to even basic logic!

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