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AMD Finds Its Zen (Part 2)

Summary

It turns out $7.00 was AMD's fair value.

Lack of competitiveness for Bulldozer reviewed.

Bullish thesis on Zen processor revisited.

An entry point in the making.

This is a follow-up to the June coverage on AMD, Inc. (NYSE:AMD): AMD Finds its Zen. No one was asking then, when the stock flew to the moon, briefing touching nearly $8.00. Now the stock buyers are asking. Advanced Micro Devices, Inc. has ugly financial metrics. Now that it is sinking, it is worth exploring those concerns.

click to enlarge)

AMD has:

  • P/E of negative 7.00
  • 5x book Book value per share of negative $0.52
  • 8,099 employees (at three months ended June 25 2016)
  • P/S of 1.21 times
  • Current ratio of 1.6x
  • Chart of SMA20 now negative 18%
  • Negative ROE

Despite the x86 licensing deal announced on April, AMD is still losing money. This accelerated up until this year.

AMD's Bulldozer is the reason AMD lost 99% of its market share to Intel (NASDAQ:INTC). Intel, by the way, is ripe for profit-taking at $36. A $40 closing price is unlikely for now. Anyway, Bulldozer's underperformance as a single core crippled AMD's competitiveness. The architecture favored heavy multi-threaded workloads as AMD bet games and apps would favor multi-threading. By limiting heat and...


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