AMD’s New Superchips Couldn’t Have Come at a Worse Time

Going just by the specs, Advanced Micro Devices (NYSE: AMD  ) might have a winner in its newest Opteron server processors. Presuming, that is, the company can find enough buyers -- a dicey proposition, Fool contributor Tim Beyers says in the following video.

The new 6300 series chips, unveiled last month, offer anywhere from 12 to 16 cores of processing horsepower. Each is also optimized for to deliver extra power-per-watt for high performance in environments where server resources are virtualized.

All good signs, Tim says, but it's also hard to envision many customers rushing out to buy when so many of the largest consumers of servers build their own from the ground up. Notably, Amazon.com, Facebook, and Google.

And yet there's at least one reason to be hopeful. AMD, to its credit, is an active participant in the Open Compute Project that's reimaging the very nature of servers. Facebook is leading the effort. In creating server chips that abide by the platform -- the new Opterons are fully compliant with AMD's Open Compute 3.0 specs -- there's a decent chance that even those who build their own will build with AMD.

That said, Tim cautions betting big on AMD in the short term. The company suffers from tightening gross margin and an inconsistent track record for growth.

Now it's your turn to weigh in. What do you think of the new Opterons? Please watch the video to get Tim's full take and then leave a comment to let us know whether you would buy, sell, or short AMD stock at current prices.

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Read/Post Comments (14) | Recommend This Article (6)

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 February 10, 2014, at 5:27 PM, MAP1288 wrote:

    LMAO @ this Motley Tool. THIS ARTICLE could not have come at a worse time....nice try, but the likes of assrat have completely discredited the fools...sorry charlie.

  • Report this Comment On February 10, 2014, at 5:35 PM, bluesky64 wrote:

    Tim,

    MF all or none attitude has blinded you guys.

    AMD will do very well with Opteron. The server market as stated has added a new theme of low price run til there done. But not all area's will follow this budget scheme.

    peace on

    New price target AMD $ 10.75 Dec 2014

  • Report this Comment On February 10, 2014, at 5:58 PM, CarltonWakefield wrote:

    DEAR TIM,

    Do you have any clue how much AMD's server business represents from the entire company's revenue?

    Did you actually check what the Year over Year revenue growth in the last 2 quarters has been???

    Did you know that Verizon has asked AMD to do its servers?...

    Are you planning on overlooking the fact that SONY and MICROSOFT sold over 7 million consoles combined (in roughly 6 weeks).

    Did you also know that the Nintendo Wii U packs AMD hardware?...

    Did you know that the hardware cycle for consoles is approximately 7 years?...

    Did you know that China has just lift its console ban which it held for over a decade?

    Did you know that the latest consoles sales were HISTORIC records?...

    Did you know that it is expected that at least 95 million consoles will be sold of each (PS4 and Xbox1)... resulting in almost 200 million consoles? (without counting Nintendo).

    Did you know that APPLE (yeah, that small Tech company with the name of the forbidden fruit) has just packed its Mac Pro with DUAL AMD Firepro's ?

    Why don't you visit Apple.com and find out how much would it cost you to upgrade your APPLE Mac Pro video cards?...

    Did you know that Electronic Arts (that small software entertainment company behind microsoft) has released MANTLE for its frostbite engine (which is in all major games).... so as to promote AMD's hardware???

    Tim... other than sitting next to a library full of books, with your "smart looking glasses" and a world globe behind you... what is it exactly that you know?...

    Any chance of replacing "Motley Fool"... for "Motley Ignorant" ?... it likely more accurate in this specific case.

  • Report this Comment On February 10, 2014, at 6:02 PM, CarltonWakefield wrote:

    Tim... can you actually post an article with this title the day the AMD has a 4.61% increase?

    YOUR ARTICLE couldn't have come at a worse time...

  • Report this Comment On February 10, 2014, at 6:05 PM, binartech wrote:

    Tim,

    Ask AMD tu change your CPU ( brain), its out of date running an Intel 8088 an that why your thoughts are not consistent. If you upgrade to an opteron everything hopefully will change for you.......

  • Report this Comment On February 10, 2014, at 6:19 PM, MAP1288 wrote:

    LOL at EVERYONE bashing this tool. The funny thing is, these guys can't move the needle at all......their continued negative reports on AMD actually work in reverse. EVERYONE can see through their attempts....hell, the MF is likely on the take from either hedge funds or INTC/NVD. It really is sort of comical that every few days they take yet another shot at AMD...all the while AMD is steady going back up. Not really sure what the powers to be at MF are wanting here....it appears they are just wanting to get clicks by creating controversial articles....but at the end of the day, all they are creating is an overwhelming lack of credibility for their opinion.

  • Report this Comment On February 10, 2014, at 7:52 PM, KenLuskin wrote:

    Tim, You know NOTHING!

    You throw at another BS title, that is MEANINGLESS!

    So, what do I think?

    That YOU are a WORTHLESS FOOL!!!

  • Report this Comment On February 10, 2014, at 7:55 PM, KenLuskin wrote:

    AMD will show dramatic year over year sales gains in 2014

    http://www.scribd.com/doc/205722916/AMD-will-show-dramatic-y...

    Your research is FOOLISH!!!

    This site is just one big UGLY marketing effort, even worse than Cramer "the clown" the street.

    Simply PATHETIC!

  • Report this Comment On February 10, 2014, at 8:15 PM, MAP1288 wrote:

    In their line of work, they think controversy like this is always a good thing. It is until you lose all credibility for being ridiculous. These guys are clowns.

  • Report this Comment On February 10, 2014, at 8:26 PM, charlesefromage wrote:

    AMD has several irons in the fire besides Opteron that you left out. Kindly update your byline which states "covers disruptive ideas in technology and entertainment" and change to "ignores disruptive ideas in technology and entertainment."

  • Report this Comment On February 10, 2014, at 9:55 PM, binartech wrote:

    TIM ....

    Read his Initials: The Ignorant Motley

    Wrote:

    "but it's also hard to envision many customers rushing out to buy when so many of the largest consumers of servers build their own from the ground up. Notably, Amazon.com, Facebook, and Google"

    I didn't knew that Amazon , Google or even Facebook are designing CPU's for servers ! Even if AMD design some server boards, blades, The above mentioned need the CPU which today can be sourced from Intel, but will see how everything goes not just with the new Opteron also the new AMD A-1100 ARM 64 bit based.

    ( TIM, you didn't make your homework )....

    This fool's think we are fools.....

    like an old song ( with small mod):

    Playing with the TIM of hearts,

    knowing it ain't really smart

    The joker ain't the only fool

    TIM'll say anything to you.

    la ... la ... la

    When first look at the motley... seems like serious but after not this but several articles they are not analysts they just try to influence our judgement,,, of course without any result........

  • Report this Comment On February 11, 2014, at 4:55 AM, ara1029 wrote:

    "At Fool.com, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics."

    Stick with the comics, Captain Tim.

  • Report this Comment On February 11, 2014, at 9:00 AM, Stuart511 wrote:

    I think Tim is Ashraff in disguise......same negativity, same results, a higher stock price at the end of the day!

    Thank you Mr. Contrarian.

    IH

  • Report this Comment On February 15, 2014, at 4:59 PM, Caligula wrote:

    I think he missed the elimination of the $200 million in forfeitures that AMD won't be paying next quarter, or, hopefully, in any future quarters . . .

    Someone should have found a power control chip or something and printed up a ton of them just to avoid paying that stupid non-performance agreement.

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