Sometimes the market is illogical and will turn on a company if they go too far above their projections, maybe under the assumption that the company doesn't have an accurate outlook. AMD has a good track record since zen and will hopefully keep it up.
Haha, "sometimes the market is illogical" - good one! Finance markets are fundamentally irrational, governed by a particular combination of gambling, superstition, naïve self-interest and fear, with a minor smattering of reasoning attempting to tie it all together. It would be more accurate to say that "sometimes companies have to under-promise in order to not trigger the various paranoias and (vaguely founded) beliefs of financial analysts and other influential people".
Since AMD has been very good about the accuracy of guidance, these people should really look at AMD being honest, and then turn on Intel and those other companies that continually spout a lot of hot air and often are obviously cooking the books when it comes to the results.
Yes, it's always best for a company's guidance to be conservative, imo. It's hard to get sued on always-conservative guidance, imo. But, the market is well-attuned to these issues, actually, and is usually good at seeing the writing between the lines, most of the time. Certainly not *all the time* however...;)
Yes, the stock markets run on herd instinct, very much like cattle...;) No question about that. Companies actually pay people on Wall Street to spread positive rumors about themselves & negative rumors about their competitors, whenever possible. It's always amusing to hear people attribute rises and falls in market stocks to particular "news items"...;) Investor markets don't work that way. The markets are most often illogical, actually, and that is why. People say, "What? Company X just announced its best quarter ever, and the stock went down???" Things like "profit taking" don't occur to those who look for "logic" in the markets. It's not all illogical, of course, thankfully...;) But the markets have their own dynamics due to the nature of the beast. Companies are best judged by their products--not their shifting-sands stock valuations...! You can always tell market n00bs when they are overly impressed with nonsense like "market cap"--especially when they insist its measure of a company's "size"...;) Such people are the primary targets of commissioned brokers!
You have to take the rumours with some value as well, as others will and in the short term at least that might as well make them true. And, of course, you add to the problem by doing so.
I wonder what TSMC's deal with Apple is like. I understand that Apple paid for EUV machines for TSMC in order to effectively completely book 5nm? And they have already booked a hefty chunk of 3nm, right?
It almost doesn't seem fair. But then again the world isn't 'fair'.
Very good news for AMD. I hope that you all continue to invest in R&D and keep working on getting investors interested in your company. PLEASE don't slow down or pause, keep pushing forward on research, and increasing and maintaining your performance lead in CPUs. As for GPU's, things are good, but I expect and hope for them to continue improving and get even better when the next line of products for the PC are released. The supply shortages cannot be helped, at the moment, but things should eventually improve in that area, it's just a question of when.
I wish AMD were better at pricing their products though. If they can only make and sell X number of processors, they should pick a price point that is closer to what people are willing to pay, then AMD can make most of the profits instead of scalpers. If the Ryzen 5 5600X were $399 from AMD, I'd not hesitate to buy it because I would be OK with where the money is going - to a company that is going to use a big chunk of that money to make new products for me in the future that I will like even more. Paying $399 to scalpers for a 5600X (or god forbid $500+ like they were all asking until a week or two ago) is just setting myself up to get screwed by them even harder in future.
At the same time, AMD's profits would look better and my AMD holdings would improve more. Win/win! Only the scalpers lose!
The main criticism against AMD's newest processors is the ~$50 increase in price. The hexa-core 5600X costs almost as much as the octa-core 3700X. The octa-core 5800X costs almost as much as the 12-core 3900XT. Is the per core improvement enough when compared against higher core count processors? Any further price increase would remove AMD's perf/$ improvement gen-on-gen.
I can find 5800X in stock where I live, selling for 479€ (+cooler), compared to the out-of-stock 5600X at 325€. Upselling to higher margin parts, instead of pissing off the buyers of their most popular processor, is in my opinion a better strategy.
Not to mention that even if AMD had raised the prices on their processors to a level that would make them look ridiculous compared with Intel, scalpers would still buy up stocks and *raise the price above that*. They'd probably have less room to increase the price, but there's no doubt they'd do it all the same, because there are (apparently) plenty of impatient suckers out there who will pay whatever price is asked to get the latest tech right awat.
Hello, is it possible to know more precisely what's that fiscal benefit AMD enjoyed and why they have a tax rate that is so low when, for example, Intel has reported a substantial increase of tax rate in its last quarter report?
To add to your comment, many companies get a one time or limited time tax benefit from this or that city/town when it comes to setting up offices and such. What happens when you go beyond the, "no taxes for the first ten years"? Yep, the company then has to start paying taxes on those properties. There have been other benefits that show up here and there to try to keep a company from moving, or things like Covid-19 relief that won't necessarily continue.
AMD isn't going to itemize every last thing when giving quarterly results, but then again, unless you are looking at a merger, there is zero reason for the public to know the exact details of what deals and the tiny details. How much is the taxes on the company headquarters? Why should a company be expected to provide that information or even have it available to the public?
Good to see. This should provide more than enough funding for them to keep up R&D momentum on the CPU side and, hopefully, start getting more GPU designs out at the same time in future - and maybe even a few mobile GPU design wins (please).
I'm enthusiastic to see the usual Intel-bulls show up and proclaim how this is Bad, Ackshually™ for AMD and offer their sage advice on how they'd run this company instead. Deicidium? Where you at? 😁
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Marlin1975 - Tuesday, January 26, 2021 - link
And to think they could have made a lot more if they could have kept up with demand.Hopefully they got a lot more wafers this quarter.
whatthe123 - Tuesday, January 26, 2021 - link
Sometimes the market is illogical and will turn on a company if they go too far above their projections, maybe under the assumption that the company doesn't have an accurate outlook. AMD has a good track record since zen and will hopefully keep it up.Valantar - Wednesday, January 27, 2021 - link
Haha, "sometimes the market is illogical" - good one! Finance markets are fundamentally irrational, governed by a particular combination of gambling, superstition, naïve self-interest and fear, with a minor smattering of reasoning attempting to tie it all together. It would be more accurate to say that "sometimes companies have to under-promise in order to not trigger the various paranoias and (vaguely founded) beliefs of financial analysts and other influential people".Targon - Wednesday, January 27, 2021 - link
Since AMD has been very good about the accuracy of guidance, these people should really look at AMD being honest, and then turn on Intel and those other companies that continually spout a lot of hot air and often are obviously cooking the books when it comes to the results.WaltC - Wednesday, January 27, 2021 - link
Yes, it's always best for a company's guidance to be conservative, imo. It's hard to get sued on always-conservative guidance, imo. But, the market is well-attuned to these issues, actually, and is usually good at seeing the writing between the lines, most of the time. Certainly not *all the time* however...;)WaltC - Wednesday, January 27, 2021 - link
Yes, the stock markets run on herd instinct, very much like cattle...;) No question about that. Companies actually pay people on Wall Street to spread positive rumors about themselves & negative rumors about their competitors, whenever possible. It's always amusing to hear people attribute rises and falls in market stocks to particular "news items"...;) Investor markets don't work that way. The markets are most often illogical, actually, and that is why. People say, "What? Company X just announced its best quarter ever, and the stock went down???" Things like "profit taking" don't occur to those who look for "logic" in the markets. It's not all illogical, of course, thankfully...;) But the markets have their own dynamics due to the nature of the beast. Companies are best judged by their products--not their shifting-sands stock valuations...! You can always tell market n00bs when they are overly impressed with nonsense like "market cap"--especially when they insist its measure of a company's "size"...;) Such people are the primary targets of commissioned brokers!Tams80 - Tuesday, February 2, 2021 - link
You have to take the rumours with some value as well, as others will and in the short term at least that might as well make them true. And, of course, you add to the problem by doing so.Tams80 - Tuesday, February 2, 2021 - link
I wonder what TSMC's deal with Apple is like. I understand that Apple paid for EUV machines for TSMC in order to effectively completely book 5nm? And they have already booked a hefty chunk of 3nm, right?It almost doesn't seem fair. But then again the world isn't 'fair'.
Rictorhell - Tuesday, January 26, 2021 - link
Very good news for AMD. I hope that you all continue to invest in R&D and keep working on getting investors interested in your company. PLEASE don't slow down or pause, keep pushing forward on research, and increasing and maintaining your performance lead in CPUs. As for GPU's, things are good, but I expect and hope for them to continue improving and get even better when the next line of products for the PC are released. The supply shortages cannot be helped, at the moment, but things should eventually improve in that area, it's just a question of when.bji - Wednesday, January 27, 2021 - link
I wish AMD were better at pricing their products though. If they can only make and sell X number of processors, they should pick a price point that is closer to what people are willing to pay, then AMD can make most of the profits instead of scalpers. If the Ryzen 5 5600X were $399 from AMD, I'd not hesitate to buy it because I would be OK with where the money is going - to a company that is going to use a big chunk of that money to make new products for me in the future that I will like even more. Paying $399 to scalpers for a 5600X (or god forbid $500+ like they were all asking until a week or two ago) is just setting myself up to get screwed by them even harder in future.At the same time, AMD's profits would look better and my AMD holdings would improve more. Win/win! Only the scalpers lose!
Rudde - Thursday, January 28, 2021 - link
The main criticism against AMD's newest processors is the ~$50 increase in price. The hexa-core 5600X costs almost as much as the octa-core 3700X. The octa-core 5800X costs almost as much as the 12-core 3900XT. Is the per core improvement enough when compared against higher core count processors? Any further price increase would remove AMD's perf/$ improvement gen-on-gen.I can find 5800X in stock where I live, selling for 479€ (+cooler), compared to the out-of-stock 5600X at 325€. Upselling to higher margin parts, instead of pissing off the buyers of their most popular processor, is in my opinion a better strategy.
Spunjji - Thursday, January 28, 2021 - link
Not to mention that even if AMD had raised the prices on their processors to a level that would make them look ridiculous compared with Intel, scalpers would still buy up stocks and *raise the price above that*. They'd probably have less room to increase the price, but there's no doubt they'd do it all the same, because there are (apparently) plenty of impatient suckers out there who will pay whatever price is asked to get the latest tech right awat.boozed - Tuesday, January 26, 2021 - link
Good stuff, keep it upCiccioB - Wednesday, January 27, 2021 - link
Hello,is it possible to know more precisely what's that fiscal benefit AMD enjoyed and why they have a tax rate that is so low when, for example, Intel has reported a substantial increase of tax rate in its last quarter report?
Koenig168 - Wednesday, January 27, 2021 - link
It's not the tax rate. It's a valuation allowance. Just google the term if you need more info.Targon - Wednesday, January 27, 2021 - link
To add to your comment, many companies get a one time or limited time tax benefit from this or that city/town when it comes to setting up offices and such. What happens when you go beyond the, "no taxes for the first ten years"? Yep, the company then has to start paying taxes on those properties. There have been other benefits that show up here and there to try to keep a company from moving, or things like Covid-19 relief that won't necessarily continue.AMD isn't going to itemize every last thing when giving quarterly results, but then again, unless you are looking at a merger, there is zero reason for the public to know the exact details of what deals and the tiny details. How much is the taxes on the company headquarters? Why should a company be expected to provide that information or even have it available to the public?
Spunjji - Thursday, January 28, 2021 - link
Good to see. This should provide more than enough funding for them to keep up R&D momentum on the CPU side and, hopefully, start getting more GPU designs out at the same time in future - and maybe even a few mobile GPU design wins (please).I'm enthusiastic to see the usual Intel-bulls show up and proclaim how this is Bad, Ackshually™ for AMD and offer their sage advice on how they'd run this company instead. Deicidium? Where you at? 😁