2-Star Stocks Poised to Plunge: AMD? (AMD)

2-Star Stocks Poised to Plunge: AMD?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, chip maker Advanced Micro Devices (NYSE: AMD ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at AMD's business and see what CAPS investors are saying about the stock right now.

AMD facts

Headquarters (Founded)	Sunnyvale, Calif. (1969)
Market Cap	$5 billion
Industry	Semiconductors
Trailing-12-Month Revenue	$6.6 billion
Management	CEO Rory Reed CFO Thomas Seifert
Return on Capital (Average, Past 3 Years)	33.9%
Cash/Debt	$1.8 billion / $2 billion
Competitors	Intel IBM NVIDIA

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 17% of the 3,765 members who have rated AMD believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, Naxias, nicely summed up the bear case for our community:

AMD is burdened by heavy debt, its products often come through the gate late, and -- worst of all -- its main competitor is a wealthy and seasoned monster. There was a time in the 1990s that, despite a far inferior R&D, it was able to outpace [Intel], but R&D is the lifeblood in this game and it was only a matter of time that AMD sank. Will non-cpu chips and boards sustain AMD? Perhaps. But we are talking about survival and not thriving, and I'd put my money in the SP500 index any day over this chip designer.

What do you think about AMD, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Intel. Motley Fool newsletter services have recommended buying shares of Intel and NVIDIA, as well as writing puts in NVIDIA. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On January 30, 2012, at 2:02 PM, TEBuddy wrote:

Its ranked 2 stars because of the biased nature of fools. They all invest in Intel, so they want to manipulate AMD down. AMD is not going anywhere, will do nothing but climb over the long term. They are not burdened by a huge debt anymore, they are not going bankrupt, they do have good R&D, and have investors that are richer than Intel.
People say they cannot keep up with Intel, but yet they make Opterons still that are more efficient and more productive, continually receiving awards for them. They make mobile chips that outperform and are more efficient than Intel's. And they make the worlds most advanced graphics, something that Intel actually FAILED at.
Intel was smart and invested in and started their SSD business. They took a deflated Flash business and started making it very very relevant. This is making them loads of money, along with their typical cusotmers that buy Intel because its Intel and never even look at value or compare it.
Report this Comment On February 13, 2012, at 11:47 AM, VanquishedAgain wrote:

@TEBuddy:
Amen.
AMD is doing fine, people who aren't involved in the tech world just don't get what they do. AMD provides the best "bang for your buck" chips on the market, right now they also out process Intel. They have a graphics division which is doing well also. I wish AMD would raise the prices on their processors because they could charge much much more, especially with a comparable Intel processor coming at a couple hundred bucks more.
It is really something to marvel at though, how a company like AMD can survive in a world where Intel spends billions paying off computer manufacturers to only use Intel's sub-par processors, and terrible Intel on-board graphics.

updated 1 day ago Sponsored by:
	DOW	12,454.83	-74.92	-0.60%
	S&P 500	1,317.82	-2.86	-0.22%
	NASD	2,837.53	-1.85	-0.07%

AMD	$6.22		+0.20	+3.32%
Advanced Micro Dev…		CAPS Rating:

4

2-Star Stocks Poised to Plunge: AMD?

Comments from our Foolish Readers

Report this Comment On January 30, 2012, at 2:02 PM, TEBuddy wrote:

Report this Comment On February 13, 2012, at 11:47 AM, VanquishedAgain wrote:

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