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Should You Own AMD in 2014? Two Fools Debate

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With 2014 just starting, investors may be thinking about which stocks they want in their portfolios throughout the year. In this segment of Two Fools Debate, Fool editor Jamal Carnette and contributor Sam Mattera discuss whether investors should own AMD  (NASDAQ: AMD  ) in 2014.

Both Sam and Jamal are concerned about AMD's future growth. Although shares rallied tremendously in 2013, as the chipmaker returned to profitability, its efforts at branching out into other spaces could be hampered by the competition. Intel (NASDAQ: INTC  ) and NVIDIA (NASDAQ: NVDA  ) , AMD's longtime rivals, continue to push their own mobile solutions as the larger PC space continues to decline.

Still, Sam thinks there could be some room for optimism. AMD's new Mantle technology could help it grow its GPU market share, while the overall PC space is showing some signs of bottoming. AMD is moving to supply chips for other products in addition to traditional PCs, and both the Xbox One and PlayStation 4 video game consoles -- of which AMD is a supplier -- have sold tremendously well.

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Read/Post Comments (11) | Recommend This Article (2)

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 Report this Comment icon found on every comment.

  • Report this Comment On January 11, 2014, at 9:31 AM, bluesky64 wrote:

    Sam, your pulling my leg AMD blow out sales and profits. Over view break down

    XBone & PS4 Sold 7.2 million units in 2013! Big win for AMD! The high-end estimate was only 6 million units total. 1.2 million more than expected! The winner of the console wars is AMD! Now we have confirmation. Analyst expect $2.2 billion revenue from gaming per year. $330 million profits per year $0.42 per share By Tom Ivan on Friday Jan 3rd 2014 at 3:05 AM PST

    Worldwide PS4 sales will reach 37.7 million units by the end of 2016, Wedbush analyst Michael Pachter has forecast. During the same period, Pachter expects Xbox One sales to total 29 million units. For the math challenged bashers that is 66.7 million total. Breaks down to over 22 million units a year. This does not include any WiiU sales, Xbox 360 or Steam Machines. 22 million units a year x $100 = $2.2 billion revenue per year. $2.2 billion x 15% = $330 million profits per year. Add in the WiiU, xbox 360 + Steam Machine and that goes up. $330 million profits comes out to $0.42 cents per share. The CEO mentioned in the Q3 conference call that margins for the game consoles are expected to go up.

  • Report this Comment On January 11, 2014, at 9:46 AM, opto50 wrote:

    AMD based products like the PS4 and Xbox One have been selling better than forecast and their GPUs and APUs are also in demand.

    Especially with the worldwide cryptocurrency phenomenon covered by the press and a Wedbush analyst that pinpointed to greatly increased AMD GPU sales as a benefit.

    This is seen in the TSMC revenue report released yesterday that saw a massive 33% year or year increase:

    Taiwan Semiconductor Manufacturing Company's (TSM) sales surged 33.7% on year in December to NT$49.68B ($1.65B).

    All this comes just as AMD is set to release their new Kaveri with HSA design along with Beema and Mullins for desktop and very low power mobile solutions that outperform Intel counterparts.

    Finally, with Mantle software acceleration, AMD will really be set with their new APUs and GPUs to take over the market from Intel and Nvidia.

  • Report this Comment On January 11, 2014, at 1:36 PM, ObieJuan wrote:

    Another great paragraph review from the Tools @ the Fools! Jam-N-Sam please check your tag line, or maybe you just do not know it's already the year 2014! Are you guy's short AMD or what? In closing "THE PC IS NOT DEAD!" It's like a fungus it will just keep grow-n as prices come down. Zombie On Fools!

  • Report this Comment On January 11, 2014, at 4:16 PM, KenLuskin wrote:

    Where's the beef?

    Seriously, WHERE is the actual discussion?

    You guys are a JOKE!!!

  • Report this Comment On January 11, 2014, at 4:24 PM, KenLuskin wrote:

    Hey Sam and Jamal,

    PLEASE READ the following carefully:

    1) AMD Earnings Estimates for Q4 2013

    2) Reasons Why AMD Margins Will Increase in Q1 2014

    3) AMD Analysis 2014 to 2017

    If you want to actually HELP investors, then you need to get the FACTS straight.

    AMD's PC chip sales will be only about 30% of 2014 sales.

    You NEED to do some actual RESEARCH before mouthing off!!!

  • Report this Comment On January 11, 2014, at 5:32 PM, kjurden wrote:

    Another "Foolish Article" NOT WORTH YOUR TIME READING!!!

    If you don't already have a stake in AMD, you need to get one. The "Fools" think that by writing negative articles like this it will desuade investors from buying's all the more reason to buy.

    Long AMD

  • Report this Comment On January 11, 2014, at 6:50 PM, KenLuskin wrote:

    Why would ANYONE care about owning anything in the PAST?

    2013 is over you bumbling FOOLS!

  • Report this Comment On January 11, 2014, at 11:32 PM, rav55 wrote:

    Revenue from XBOX and PS4 will exceed more than $700 million since release 7 weeks ago. That's a quarterly equivalent of at least $2.8 BILLION per year. Which is OVER half of the previous years revenue coming from an entirely NEW revenue stream.

    Besides making money for AMD this three more things that money just can't buy.

    It demonstrates that Intel is no longer the x86 HEGEMON. The consoles loss was an abosolute disaster for Intel and nVidia. Not because of the money lost but the suppor that developers will now give to AMD's HSA architecture.

    It puts AMD into 7 million new living rooms world wide, demonstating to an entire new generation of computer gaming geeks that AMD is a BETTER choice than OVER-PRICED INTEL.

    It also creates a developer base that will support the x86-64 ISA extensions that AMD will be creating to deploy MANTLE and other close to the metal API's. Intel can't do this as AMD OWNS the instruction set. This core of developers are the critical mass needed to change the market.

    If you need to calculate Pi to a bazillion decimal places two nanoseconds faster than an AMD CPU using ONE core of your very expensive quad core Intel CPU then by all means by Intel. However if you want an Avatar quality GUI and gaming experience then buy AMD.

  • Report this Comment On January 12, 2014, at 5:24 AM, enihcam wrote:


  • Report this Comment On January 15, 2014, at 8:45 AM, klaydo wrote:

    If you guys at Motley continue to give negative attention to competitors that you're invested in, you're going to cause those of us that look to you for advice on investing to question your motives.

    Regaurdless of how you choose to invest as individuals and as a company, you should still give informed unbiased investment advise to those who are looking.

    I'm very new to investing and I can see the bias that both Motley and The Street show toward certain companies and quiet frankly it's poor business in my opinion.

  • Report this Comment On March 07, 2014, at 10:33 AM, tokat9 wrote:

    Interesting debate. NOT! What kind of crap is this?

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Sam Mattera

Sam has a love of all things finance. He writes about tech stocks and consumer goods.

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