Beat Wall St estimates, share price falls 5%. Who else but... AMD? AMD says it managed to boost revenues by 34 per cent as its Ryzen and Radeon chip lines rack up sales. The other-other CPU builder reports it managed to turn a profit for both the quarter and the 2017 fiscal year. For Q4: Revenues of $1.48bn were up 34 per cent from the year-ago quarter's $1.11bn and ahead of analyst …
Well, that's not especially surprising. Share prices changes aren't based on past performance (aside from public mistakes). If investors don't see a clear path to *increased* growth, they won't buy in. That's why Twitter's share prices keeps getting knocked despite the company continuing to be a successful business, they're not in perpetual, exponential growth, therefore they must be destroyed.
"That's why Twitter's share prices keeps getting knocked despite the company continuing to be a successful business, they're not in perpetual, exponential growth, therefore they must be destroyed."
Wait, what? Twitter is successful? Is this a new definition of successful where losing hundreds of millions of dollars a year is a success? What would Twitter being a failure look like? Losing less or more money?
Look at their equity. They're losing money because they keep making investments and buying companies, not because they're not making enough. Their regular operating costs are about $500-600 lower than their annual revenue. If they'd just stop buying every new company in California, they'd be fine. The business itself is successful, the management isn't.
Intel or Nvidia can have massive problems on products or numerous known sometimes catastrophic issues and yet their stock price still goes up, yet AMD who went from being in a very bad state for many years had a very awesome 2016-2017 and yet their stock went from ~$1.63 up to ~$15.40 (for a very short time) than when their 1-2-3-4 quarter numbers for 2017 come available to show they actually did VERY well against their strong competitors, their stock price basically does not move, if anything it goes down.
Yet as mentioned, Intel as a base example MASSIVE issues with meltdown and spectre share price had a "blink" at best nothing more.
I just do not understand anymore, I guess AMD will have to have a 200 billion $ quarter before folks actually give them the "worth" they deserve??
If you strip out the "extraordinary event" last year (the GlobalFoundaries write-down), the income was $255m profit for FY2016. Compare that to an income of $179m for FY2017. If Ryzen/Epyc/etc are selling like hot cakes then it would be reasonable to expect better profit margins. I suspect the street were also looking for better news for FY2018. The article here doesn't contain anything about any forecast, which is likely also what dinged the price.
I suspect Intel's stock price went up because they announce that they will have meltdown+spectre silicon ready later this year, and analysts expect all the cloud providers to refresh their servers to get rid of the problems. Remember that Dilbert cartoon where the PHB promised a bonus for every bug fixed? Intel just coded themselves a Ferrari - they instantly made all existing silicon undesirable. Customers can't put off buying new kit so Intel will keep churning out buggy silicon to customers and banking the profit, but the customers could want new silicon ahead of their normal refresh periods to get rid of the bugs, so Intel scores a MASSIVE win. All it has to do is make sure the legal costs are less than the bonus.
Indeed; AMD's share prices had already increased in the past, due to Ryzen being a much more attractive product than Bulldozer. Now, Intel is selling more powerful chips that are competitive with Ryzen. So it makes sense to expect that AMD's current high levels of sales, already reflected in their current share price, will dip somewhat in the future rather than increasing even more.
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