31.84 +0.14 (0.44%)
Pre-Market: 8:16AM EDT
|Bid||31.75 x 4000|
|Ask||31.78 x 36100|
|Day's Range||30.84 - 31.74|
|52 Week Range||16.03 - 35.55|
|Beta (3Y Monthly)||3.18|
|PE Ratio (TTM)||175.14|
|Earnings Date||Oct 22, 2019 - Oct 28, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||33.18|
If you were watching the financial news on July 31, when the second-quarter earnings results caused a 10.1% slide in Advanced Micro Devices (NASDAQ:AMD) stock, then you'll understand why investors are nervous about this well-known chipmaker. A single day saw a $3.76 billion reduction in the company's market cap, and nobody wants to catch a falling knife even if it's a knife they recognize and respect.Source: Sundry Photography / Shutterstock.com I'm usually a "buy low, sell high" kind of investor, but a number of factors have put me on the side of the majority when it comes to Advanced Micro Devices stock: the risk-to-reward ratio doesn't seem favorable to me at the moment, and as I see it, the bears have too much evidence on their side to justify taking a long position in AMD today. This Is No Time to Get Greedy with AMD StockDon't get me wrong -- I like a stock with upward momentum as much as anybody, but there comes a time when the company just looks like it's running out of gas. The AMD stock price started this year in the $18-range and rocketed up to the $30-range, providing outstanding returns for the so-called "momo" traders; lately, however, the "momo" has turned into "no-go" as the trajectory is flattening out and I believe it's because the smart money is taking profits.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Marijuana Stocks to Ride High on the Farm Bill When we examine the pace of AMD stock's incredible gains, a reasonable investor would have no qualms about cashing in their shares. Think about it: the AMD stock price is up 180% since January of 2018, has increased at least 80% for two consecutive years, and recently attained its highest price in 13 years -- all during a time when the broader semiconductor sector has mainly experienced moderate growth.As they say, "Bulls make money, bears make money, pigs get slaughtered." There's growth and then there's unsustainable growth, and given the angle of incline of Advanced Micro Devices stock, I'm in no mood to pig out on AMD shares. An Analyst Stays on the Sidelines With AMD StockEvidently I'm not alone in my cautious stance, as Piper Jaffray analyst Harsh Kumar recently assigned AMD stock a neutral rating and a conservative price target of $33, implying only moderate growth over the next 12 months. In defense of this position, Kumar aptly cited the fact that the AMD stock price has increased 69% so far this year, while the semiconductor sector hasn't even gained 30% during that time frame.Not that Kumar is leaning bearish on Advanced Micro Devices stock -- on the contrary, the analyst views AMD as having an "exciting" and "innovative" product portfolio which "should drive gross margin leverage and provide operating leverage as revenue growth outpaces operating expense growth."On the other hand, Kumar's caution stems from a number of factors, including the sheer fatigue of the share price after a relentless bull run as well as the company's vulnerability to Sino-U.S. trade tensions: "Given the stock's recent appreciation… and the current macro/geopolitical environment, we see the stock as more or less fully valued."To be frank, I don't expect the trade war to continue indefinitely; neither side is particularly interested in pursuing this experiment in brinksmanship to its most politically inexpedient conclusion. Until the tariff tug-of-war is at least brought to a detente, however, I find myself taking sides with Kumar in his reluctance to throw caution to the wind and recommend a long position in AMD stock amid a painful, protracted international trade conflict. The Takeaway on Advanced Micro Devices StockGreed kills, and buying AMD stock in a market environment that's concurrently tense and richly valued is, in my ever-humble opinion, just asking for trouble. And if you'll indulge me in a brief musical conceit, I'd like to end this piece with a stanza from Kenny Rogers, whose classic tune "The Gambler" is as applicable to AMD stock today as it is was to high-stakes poker in 1978:You've got to know when to hold 'em Know when to fold 'em Know when to walk away And know when to run.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Advanced Micro Devices Stock Looks Exhausted appeared first on InvestorPlace.
The statement was made at Gamescom 2019, the world's biggest gaming event, which is being held through Aug. 24 in Cologne, Germany. Is Intel Really Best? Despite Intel's dominance in the CPU market, it has been slowly and ceding share to AMD since the second quarter of 2017, the year the Ryzen line of microprocessors was launched. At the event, Severson compared Core i9 990K to AMD's Ryzen 9 3900X, stating that in real-world testing, Intel's technology was superior among similarly priced products.
Nvidia (NASDAQ:NVDA) stock was a Wall Street darling not too long ago. But lately it has lost its shine and now cannot hold a rally long enough to flip this massive down slide that started last year. Year-to-date, Nvidia stock still lags the chip champ Advanced Micro Devices (NASDAQ:AMD) by more than half.Source: Shutterstock On its way up to $290 per share, NVDA rode the Bitcoin craze up fast. But as the Bitcoin mining headlines faded, the Nvidia stock price fell off a cliff. Ironically, at the highs of almost $300 per share the consensus among experts was that NVDA was a must-buy. Now that it's a lot cheaper with almost all the same fundamentals that supported the rally, it's hard to find any fans of it on Wall Street.Fundamentally speaking NVDA stock is not cheap at 45 price-to-earnings ratio. But owning it at these levels for the long term is not likely to be a giant debacle. This is especially true for patient investors. The company is well set to capitalize on several segments for the next decade of tech.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The 10 Best Marijuana Stocks to Buy Now Shorter-term, it is important to pay attention to what the clues in the Nvidia stock chart suggest. There are definite levels that stand out from the latest price action. What You Should Expect From NVDA NowTraders reacted positively to the earnings report this week. NVDA spiked 15% and is now trying to hold the rally in order to extend it. It is important for it to hold higher-lows and break out from $180 per share. If the bulls are able to do this, Nvidia stock should trigger a bullish cup-and-handle breakout to target $200 per share or higher.This won't be easy and there will be resistance, first at the neckline, then at $194 per share. These two levels have been significant prior failure zones. So the onus is on the NVDA stock bulls to prove that they can hold the trend of higher-lows in order to attack the neckline that has so far proven so elusive.For that to happen, Nvidia will need the help of the general markets. This week is another potentially pivotal week for stocks, as today we get the Federal Reserve minutes from their last meeting. And on Friday we hear from the Chairman himself. Recently Fed head Jerome Powell's effect on the markets has been very violent. So coming into the event on Friday the NVDA trade is somewhat binary. Short term, it has more gambling than investing in it.The fear index -- the CBOE Volatility Index (INDEXCBOE:VIX) -- is still elevated but nowhere near critical levels. Only days ago it was pushing $25 per share and now it's below $20. So there is no obvious ramp up in fear, even as equities hang this close to all-time highs in the S&P 500 for example. * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio In other words, this market is indeed climbing the wall of worry. And with a little bit of luck, the rally continues so that Nvidia stock can actually breakout of this funk and recover some old glory.Depending on the portfolio, it is okay to hold or buy NVDA here in anticipation of the breakout as long as investors place proper stops below.Alternatively, instead of buying upside hope, we can sell downside risk into the Nvidia stock price. For example, you can sell the Dec $130 put and collect $2 per contract to open. This way you don't even need a rally to profit as long as Nvidia stock stays above that level, you are a 100% winner. The breakeven from that trade would be at $128 per share. Below it, you would own the shares and accrue losses.Regardless of what you decide to do, you should do it in tranches. This leaves room for adjusting the risk if and when it's needed.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room for free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Nvidia Stock Finally Has What It Takes to Break Out of $200 Again appeared first on InvestorPlace.
Nvidia (NASDAQ:NVDA) reported its Q2 earnings last Thursday and the results propelled Nvidia stock to big gains: nearly 15% over the next several days. That rally ran out of steam on Tuesday, though. NVDA closed the day at $167.87 for a 1.7% loss.Source: Hairem / Shutterstock.com Will the recovery continue or will Nvidia stock price drop further? The Market Loved NVDA Q2 Earnings Last Thursday, Nvidia reported its Q2 earnings.InvestorPlace - Stock Market News, Stock Advice & Trading TipsRevenue of $2.58 billion was down 17% year-over-year, and adjusted earnings per share of $1.24 were down 36% compared to last year. NVDA issued guidance for Q3, calling for revenue of $2.90 billion plus-or-minus 2% (compared to third-quarter revenue of $3.18 billion last year).The market reaction was swift. Nvidia stock immediately surged, and shares gained nearly 15% before hitting a wall yesterday. Lowered Expectations for Nvidia StockOf course, the question has to be asked: why were investors so excited about NVDA when the company's revenue and EPS were both down significantly compared to last year? A big part of that is lowered expectations.Nvidia and graphics card rival Advanced Micro Devices (NASDAQ:AMD) have both been hit hard in 2019 by the bottom falling out of the crypto currency mining market. And both have been affected by the ongoing trade war with China. Those two factors have reset expectations about NVDA earnings.The money spent on graphics cards used to "mine" Bitcoin and other crypto currencies was an unexpected boost to Nvidia and AMD last year. At one point in 2018 the industry was generating 10% of NVDA's total revenue -- and when the crypto market tanked, so did Nvidia stock price.In addition, like many tech companies, Nvidia stock has been caught in the crossfire of the trade war between the U.S. and China.With these two big factors in play, analysts were expecting lower numbers from NVDA and the company delivered numbers in line with those expectations. Sequentially, there were signs of improvement, with revenue up 16% compared to Q1, while EPS gained 41%. But there was a more to the Nvidia stock rally than that … Some Positives + Big News for NVDA StockBoosting the positive reaction to Nvidia's earnings were some wins within key segments. In particular, Nvidia's Automotive division posted 30% revenue growth compared to last year, hitting quarterly record revenue of $209 million. The Professional Visualization division also saw 4% growth to $291 million. In addition, every one of Nvidia's divisions posted sequential quarterly revenue growth compared to Q1. Gross margins also saw a quarterly improvement at 60.1% compared to 59% in Q1.NVDA investors were also reacting to a number of timely events that bode well for the company. At the Gamescon conference on Monday, Nvidia and Microsoft (NASDAQ:MSFT) announced that ray tracing support will be coming to the PC version of "Minecraft." Given that "Minecraft" is the best-selling video game in the world (over 176 million copies sold) and only Nvidia's GeForce RTX graphics cards are capable of real-time ray tracing, this is seen as a big win for the company. At a higher level, a 90-day extension of the reprieve of the U.S. trade ban against Huawei was announced on Monday, and that has been seen as possibly signalling an attempt by the U.S. to cool tensions and the trade war with China.Yesterday at Gamescon, NVDA announced new drivers for its GeForce RTX cards that it claims will improve frame rates by up to 23% on a number of popular PC games, which would be a huge win. That announcement failed to impress investors - given the 1.7% Nvidia stock drop -- but gamers are excited.In short, Nvidia stock still has room for growth and it has some momentum. The stock is up around 29% since the start of the year, but even after the 15% post-earnings run NVDA still far from the $192 level it hit in April. Given the stream of good news for the company, odds are that Tuesday's loss was a speed bump.As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Nvidia Stock Rally Stalls, but There's Still Room for Growth appeared first on InvestorPlace.
NVIDIA (NVDA) relies heavily on its gaming business for more than half of its revenue, but lately, its Gaming segment has been underperforming.
The struggles continue for Intel (NASDAQ:INTC). Just as investors thought the company finally turned the corner, disappointing earnings reports have dashed both the hopes for and the price of Intel stock.Source: JHVEPhoto / Shutterstock.com Intel has seen its share of setbacks recently. AMD (NASDAQ:AMD), the company once regarded as "little brother" during the PC era, has taken a huge technological lead over Intel.The company also found itself unable to catch up with Qualcomm (NASDAQ:QCOM) in the 5G smartphone modem market. Intel stock attained a low valuation. However, the company has much to prove in its struggle to regain a leadership position in the chip market.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Intel's Playing Catch-UpThe recovery that has blessed PC-era stocks such as Microsoft (NASDAQ:MSFT) and Nvidia (NASDAQ:NVDA) has somehow left Intel behind. * 10 Undervalued Stocks With Breakout Potential As these companies found success in new niches, Intel continued to struggle with where to go next. Management missteps and scandals over the last few years only contributed to the lack of growth.The company had tried to compete with Qualcomm in the smartphone modem market. During the second quarter, they waved the white flag and sold that business to Apple (NASDAQ:AAPL).Also, Intel's management had hoped data center chips could become the company's next great revenue driver. Intel has not lost this battle yet, but it has faced a strong competitive challenge from AMD. Rumors abound that Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) has begun to make Google-specific server boards with chips from AMD and not Intel.This represents a severe setback to Intel. This happened because AMD took a massive lead over Intel in this key area. AMD continues to increase CapEx on its 7nm chip at a time when Intel struggles to ramp up production on its 10nm chip. Intel Still Could RecoverIntel saw a massive decline following the first-quarter earnings report. A subsequent recovery fell back following the second-quarter release. Consequently, Intel only trades about 10% above its 52-week low.However, despite these setbacks, investors should not count Intel out . As our own James Brumley mentioned, AMD's 7nm Ryzen chips have not always reached the advertised operating speeds. Hence, AMD's lead in this area may turn out to be much less than advertised.Moreover, InvestorPlace contributor Chris Lau also points out that Intel has an enormous opportunity in 5G. Once users begin to adopt 5G, "network cloudification" could again bring servers powered by Intel chips to the forefront. The Bottom Line on Intel StockIntel appears well-positioned for buyers. Now, the INTC stock price currently stands at around $47 per share. This takes the forward price-to-earnings (PE) ratio to just 10.6.Admittedly, the fact that profits will shrink by an estimated 4.1% this year and only grow by 1.4% in 2020 does not inspire investors. And with INTC falling back after looking like it will sustain a recovery, investors may feel gun shy.However, the current valuation represents a low for INTC by historical standards. The PE ratio averaged 15.6 over the last five years. Also, INTC stock often saw a PE ratio well above 30 during the PC era.If the current performance of MSFT stock is an indication, a return to prominence could bring Intel the same level of multiple expansion. Furthermore, Intel stock has repeatedly bounced back whenever it fell below the $45 per share level. Hence, I see little downside at current prices.Also, indications point to a sustained recovery, eventually. Analysts forecast an average profit growth rate of 7.33% per year over the next five years.Also, the dividend of $1.26 per share yields almost 2.7%. It also has risen every year for the last four years and has never seen a cut. All of this leaves investors with little to lose by buying at these levels.Profiting from Intel stock may require some patience. However, it could again attain some level of market leadership once 5G becomes more widely adopted. If nothing else, investors can do worse than collecting a 2.7% dividend yield while they wait for this recovery.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post You Should Buy Intel Stock Before It Mounts Its Comeback appeared first on InvestorPlace.
Earnings season for semiconductor companies is for the most part over. The reports showed that data center trends are "still soft," while the PC market is "looking good," according ...
AMD stock is popular among investors, as is evident from its 180% increase since January 2018. Investors are betting on its market share gain from Intel.
CPU market share figures show a positive trend for AMD and a negative trend for Intel. AMD is up 80% for the second straight year and is still growing.
Chief Technology Officer & EVP of Advanced Micro Devices Inc (30-Year Financial, Insider Trades) Mark D Papermaster (insider trades) sold 30,000 shares of AMD on 08/15/2019 at an average price of $30.63 a share. Continue reading...
After downgrading the chip sector almost a year ago, brokerage firm Raymond James now is seeing some attractive semiconductor stocks. They include ON Semiconductor and NXP Semiconductors.
Advanced Micro Devices, Inc. (NASDAQ: AMD ) has an “exciting” product portfolio, but the recent rise in the semiconductor company’s share price is keeping Piper Jaffray on the sidelines. The Analyst Harsh ...
David Shaw got his start in 1988, when he convinced the Wall Street investment firm Paloma Partners to back him in the new field of quantitative trading. Shaw, a brainy buy with a PhD in computer science and a complete neophyte in financial world, told his backers, “I think I can use technology to trade securities.”He was right. His firm, now the D.E. Shaw Group, has taken it’s initial $28 million in capital and grown it into a $47 billion hedge fund, earning more than $25 billion for its investors. Shaw himself retired from active leadership of the firm in 2001, although he remains connected to the trading operations.In its most recent 13F filing, the D. E. Shaw Group revealed that it has upped its holding in Micron Technologies (MU), while cutting back drastically on American Micro Devices (AMD). A brief look at the numbers tells the story.Shaw Group bought 1,386,790 MU shares, boosting the fund’s holding by 53%. At the same time, the filings show that the fund reduced its holdings of AMD by 2,996,831 shares, or 65%. Prior to the transactions, Shaw Group’s holding in AMD was almost double that in MU; the fund has now reversed that position and holds more than twice as many Micron shares as AMD. It’s a drastic change and deserves some closer examination. The Selling Case for AMDAt first glance, AMD doesn’t look like a stock to sell. It’s up almost 73% year-to-date, and is one of 2019’s successful turnaround stories. AMD chips have quickly developed a reputation for high performance and quality, and that in turn has given them the leverage needed to draw market share away from rival chip-maker Intel (INTC). AMD have been on a tear. So why the sudden change in outlook by one of the world’s smartest quant trading hedge funds?The answer may lie in that year-to-date gain. AMD opened at $18.01 on January 2; it closed at $31.18 on August 16. That gain has investors worried that, for now at least, AMD is played out, without significant room for near-term growth. Recent reviews from top Wall Street analysts support this contention.5-star analyst Cody Acree, of Loop Capital, initiated his coverage of AMD with a Hold rating, saying, “We like the solid share gains but see the valuation as fair.” His price target, $32, is in line with that, suggesting just a 2% upside to the stock. Acree is joined by Mizuho’s Vijay Rakesh and Susquehanna’s Christopher Rolland. Both 5-star analysts reiterate Hold ratings on AMD, and maintain their price targets of $36 and $34 respectively. Overall, AMD’s analyst consensus rating remains a Moderate Buy, but that appears to be shifting. Of the 10 buys, 11 holds, and 1 sell assigned in the past three months, 3 holds were given just last week. The stock sells for $31.18, with an average price target of $34.10. This suggests an upside potential of 9%. The Buying Case for MicronBetween June 2018 and June 2019, Micron didn’t look like a stock to buy. The combination of increasing supply and slower demand in the memory chip market put the obvious price pressure on the company, and MU shares were squeezed, losing half their value. MU seems to be coming out of the woods, however, as improved business confidence has led to increased demand which has in turn started working down the memory chip segment’s oversupply problem. In a conference call, Micron management said, “Demand is starting to return in a meaningful way, driven by renewed demand in the cloud and graphics segments.”Micron’s year-to-date gain of 37% has outperformed the markets, but has not sparked worries that it’s maxed out. Investors look at MU and see a stock that’s improving, with room for more growth.5-star Needham analyst Rajvindra Gill lays out the bulls’ case for MU. He says, “We view supply cuts as positive developments for Micron and the rest of the memory industry. We continue to be bullish on a stabilization in the supply-demand dynamic for NAND and DRAM in 2H19.” Gill’s $50 price target implies and upside of 14% for MU shares.Sidney Ho of Deutsche Bank, concurs in the bullish assessment, writing, “We have confidence that the company's August quarter will be the trough this cycle.” Ho raised his price target by 22%, to $55, indicating a potential 26% upside.The rest of Wall Street largely buys into what the chip giant has to offer, as TipRanks analytics reveal MU as a Buy. Out of 22 analysts polled in the last 3 months, 13 are bullish on Micron stock while 6 remain neutral, and 3 are bearish. (See MU'S price targets and analyst ratings on TipRanks)
NVIDIA stock’s downtrend seems to be ending. NVIDIA’s revenue is growing sequentially, driven by strong demand for laptop GPUs and game console processors.
Despite an initially negative response after earnings, investors holding Advanced Micro Devices (NASDAQ:AMD) are growing confident in its prospects. For the rest of 2019, AMD expects growth accelerating in the desktop, notebook, server, and semi-custom space.Source: Shutterstock For the second quarter, AMD reported EPS of $0.08, despite revenue falling 12.81% year-over-year to $1.53 billion. Strong CPU revenue was offset by a drop in semi-custom and GPU sales. Weaker chip sales for consoles made by Sony (NYSE:SNE) and Microsoft (NASDAQ:MSFT) weighed on overall results. Looking ahead in this space, both Sony and Microsoft will source SoCs from AMD for their next-generation consoles. And even though revenue will probably remain weak from semi-custom, AMD's profit margins will remain at healthy levels.AMD's next-generation Rome server is on time and is exceeding expectations. The chip is delivering on industry-leading performance and TCO (total cost of ownership) for an expanded number of cloud and enterprise workloads. Rome has more traction than the first-generation EPYC processors. Twice the number of platforms are developing for this architecture. And AMD has a larger set of partners this time around. Add four times more enterprise and cloud customers involved before its launch and it is clear that sales will grow at a better pace. This will give profit margins a healthy lift.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Rebound from Weak GPU SalesDuring the quarter, AMD ramped up production of Radeon 5700 GPUs. The release introduces the new RDNA architecture that delivers up to 1.5 times more performance per watt compared to previous generations. AMD noted strong initial demand, with third-party reviewers complimenting the GPU's favorable game performance relative to its pricing.Although revenue declined in the Graphics segment due largely to lower channel sales, data center GPU sales rose significantly. Blockchain-related revenue was negligible in the quarter, as expected. But with bitcoin prices rebounded since May, investors might expect sales from the cryptocurrency resurgence potentially recovering. Growth OpportunityAMD's 7-nanometer product line will eventually offer margins greater than 50%. For the third quarter though, the company guided gross margin of 43%. But by Q4, this should increase. TSMC (NYSE:TSM) is more than supportive operationally in meeting the ramp-up of these chips. Barely a month on the market, Ryzen's third-generation CPU promises to add to AMD's revenue. Launched globally, the Ryzen refresh will accelerate AMD's market share gains in the PC market. Additional product releases that add to a better product mix suggests profits will grow at improving rates. * 7 Great Small-Cap Stocks to Buy Sales of the fifth-generation chip production for Microsoft and Sony consoles will start adding to AMD's revenue in the second half of the year. Ahead of the holiday season of 2020, investors should expect the company to book significant revenue growth in the semi-custom space.AMD's multi-year deal to supply GPU licenses for Samsung ushers in a new era for GPUs in the smartphone space. AMD will earn $100 million from the deal, offset by some specific development costs and COGS (cost of goods sold). But most importantly, it broadens the chip maker's revenue line in the Asian-Pacific region. So even though weak performance in China had a minimal impact on its revenue, AMD may now develop a market in the smartphone space. Valuation and Your Takeaway on AMDBased on 22 analysts offering a one-year price target on AMD, the average target is $34.10, not far from the $31.18 recent closing price. Similarly, investors forecasting revenue growth of at least 15% in a 5-year DCF Revenue Exit model will arrive at a similar price target. With AMD's rich product launch schedule ahead and its 7-nanometer road map, AMD stock will continue rewarding investors over the next few years.Disclosure: As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post AMD Stock's Post-Earnings Recovering Shows Investor Optimism appeared first on InvestorPlace.
AMD (NASDAQ:AMD) has surged higher by more than 60% year-to-date. The sharp rally in AMD stock has been triggered by new product launches and a healthy pipeline of exciting products. In addition, sustained improvement in gross margin has contributed to the upside.I remain bullish on AMD for the long-term with the company making inroads in the cloud segment, artificial intelligence and augmented reality. However, I believe that the stock is likely to trend lower in the near to medium-term.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis article will discuss the key concerns that make me relatively bearish on Advanced Micro Devices stock. Global Slowdown and Possible RecessionThere are stocks that are relatively immune to a slowdown or recession. Typically, these stocks are in industries like healthcare, pharmaceuticals or other necessities. * 10 Cheap Dividend Stocks to Load Up On However, Advanced Micro Devices is sensitive to an economic downturn. As the yield curve inverts in the United States and the United Kingdom, slowdown or recession is the first major concern for AMD stock.To add to the global economic woes, Europe reported PMI that indicates a manufacturing sector recession. In addition, China reported its lowest industrial production growth in 17 years.Clearly, the global economy is slowing down sharply and this will impact the results for AMD in the coming quarters.Any potential analyst downgrade in terms of revenue or EPS will result in the stock trending lower and I expect that to happen. Trade War with ChinaThe ongoing trade war between the United States and China is showing no signs of de-escalation.I believe that trade war will continue to impact AMD stock with the company having approximately 30% business from China.As an example, Advanced Micro Devices sales were impacted because it could not sell chips to Huawei in the previous quarter. While Donald Trump has announced that Huawei can buy from U.S. suppliers again, the uncertainty amidst trade war sustains.Another negative implication is that AMD might need to increase prices or take a hit on margins if chips produced in China are imported to the United States for sale. Analysts are already worried about the tariffs and the coming quarters will provide clarity on the impact.It is estimated that by 2023, there will be 354 million PC gamers in China. This is more than the population of the United States. This presents a big growth opportunity for companies like AMD and Nvidia (NASDAQ:NVDA).However, it remains to be seen if these companies can withstand the impact of the trade war and grow amidst uncertainties. Nvidia has an Edge over AMDIf I had to choose between Advanced Micro Devices stock and Nvidia, I would prefer to invest in the latter.Nvidia reported strong second-quarter results and the stock is already higher by 7% as I write. In particular, the company's gaming segment strength is noticeable.If we also look at the video card market share, Nvidia is a clear leader with a 60.23% market share. AMD is a distant second with a market share of 23.03%.With Nvidia having a relatively expensive product offering, the market share trend is an indication of the fact that consumers prefer high performance over price.It is true that AMD is looking at introducing some high-end models in the coming years. This is likely to heat-up the pricing war between the rivals. However, Nvidia has a clear edge now and the stock is likely to sustain the upside after second-quarter results. Final Words on AMD StockThere is no doubt that AMD has exciting prospects in the coming years. The company has also reduced its balance sheet stress with leverage declining from 4.6 in 4Q17 to 1.9 in 2Q19. However, economic headwinds, trade war and competition with Nvidia in the gaming segment are likely to hurt AMD stock in the near-term.In the medium to long-term, the company has the advantage of out-performance in the CPU and server market. Additionally, the company's high-end GPU launch can be a potential game-changer in terms of market share.Considering the fact that AMD stock price has surged by more than 60% YTD, I would advise investors to wait for some correction. A decline of 15% to 20% from current levels is likely considering economic and trade war headwinds.As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Wait Until After the Looming Correction to Buy AMD Stock appeared first on InvestorPlace.
Investors weren't so sure they could trust the market on Thursday, following Wednesday's breakdown in response to recession worries. They forgot about those doubts by Friday though, with the S&P 500 rallying 1.44% to finish the week on a high note.Source: Shutterstock General Electric (NYSE:GE) led the charge, rallying nearly 10% after plunging on Thursday in response to accusations that its books understated the full extent of its insurance liabilities. Advanced Micro Devices (NASDAQ:AMD) had a big day as well though, gaining 5% buoyed by rebounding rival Nvidia (NASDAQ:NVDA).Not every name was a winner on Friday though. Palo Alto Networks (NYSE:PANW), for instance, fell more than 7% on more management changes that may or may not help, but will certainly prove disruptive.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Great Small-Cap Stocks to Buy As the new trading week gets going though, it's the stock charts of Activision Blizzard (NASDAQ:ATVI), Jack Henry & Associates (NASDAQ:JKHY) and Amazon (NASDAQ:AMZN) that merit a closer look. Here's why. Amazon (AMZN)In early July, Amazon looked unstoppable. It had just rekindled a recovery effort that began in January, pushing up and off a support liner that started to take shape in February. That move jolted AMZN back above a key moving average line as well.As was the case in May, the advance fell apart once it got overextended, falling back just as much. This time, however, the selloff stopped exactly where it needed to. Better still, where the selling stopped is precisely where a renewed rally effort would materialize. * Click to EnlargeTwo floors have converged, and AMZN is finding support at both of them. One is the straight-line support plotted in yellow on both stock charts. The other is the 200-day moving average line, in white. * If the prospective bounce takes hold, it will still have to contend with proven technical resistance around $2,035, marked with a light blue line on the weekly chart. * While primed for a turnaround, the bullish days that have kept Amazon shares above the 200-day moving average line have been on thin volume. There's not a lot of evidence of strong bullish sentiment here. Jack Henry & Associates (JKHY)Jack Henry & Associates was one of the few names that was unable to make forward progress on Friday, pulling back just a bit after soaring earlier in the week.Still, there's much to like about the circumstances JKHY stock has made for itself over the course of the past several weeks. And, just within the past few days the scales have started to lean in a bullish direction again. The trick will be clearing one more hurdle that was verified with Friday's high. * 15 Growth Stocks to Buy for the Long Haul * Click to EnlargeThat last hurdle is the upper boundary of a converging wedge pattern that has been forming since September of last year, plotted in yellow on both stock charts. * Although tests of the wedge's upper boundary have failed before, this one's starting out with an advantage. This time, the test is coming after the purple 50-day moving average line has moved above the white 200-day line. * It's confirmed by the Chaikin line's move above the zero level on the weekly chart, though even just a visual inspection of the same chart shows bullish volume has grown in just the past couple of weeks. Activision Blizzard (ATVI)Finally, the last time we took a look at Activision Blizzard back on July 29, it was working on breaking above its 200-day moving average line. It was a good effort too. A long streak of higher lows and a narrow trading range were coiling the spring tight, setting up a prolonged move.That's what ended up happening later in the month. But, it didn't last. The effort was up-ended a couple of days later. Nevertheless, the bulls are taking another shot, and this one looks even better positioned than the last. * Click to EnlargeWhat we're seeing now and we didn't see before is a better-defined streak of higher highs and higher lows, framed with yellow and light-blue lines -- respectively -- on both stock charts. * Simultaneously, we're on the verge of seeing a so-called golden cross, where the purple 50-day moving average line crosses above the white 200-day moving average. It's often a signal of more bullishness ahead. * Beyond that, a ceiling at $51.44 was confirmed that's to the late-July peak. That's also where shares topped in January. That level is plotted as a darker blue line on both stock charts.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 3 Big Stock Charts for Monday: Amazon, Activision Blizzard and Jack Henry & Associates appeared first on InvestorPlace.
(Bloomberg) -- In the semiconductor industry, bigger is not usually better. For 60 years, chip companies have strived to make the brains of computers as tiny as possible.Startup Cerebras Systems will turn this maxim on its head on Monday when it unveils a processor measuring roughly 8 inches by 8 inches. That’s at least 50 times larger than similar chips available today.The logic behind going big is simple, according to founder Andrew Feldman. Artificial intelligence software requires huge amounts of information to improve, so processors need to be as fast as possible to crunch all this data -- even if that means the components get really chunky.The company’s Wafer Scale Engine chip is large because it has 1.2 trillion transistors, 400,000 computing cores and 18 gigabytes of memory. (A typical PC processor will have about 2 billion transistors, four to six cores and a fraction of the memory).“Every square millimeter is optimized for this work,” Feldman said. “AI work is growing like crazy. Our customers are in pain.” The biggest limitation of current AI systems is that it takes too long to train software, he added.Feldman has experience and industry backing that’s essential to tackling an engineering problem of this magnitude, he said. He co-founded server maker SeaMicro Inc. and sold it to chipmaker Advanced Micro Devices Inc. for more than $300 million in 2012. Cerebras has raised over $100 million from Silicon Valley investors including Benchmark, Andy Bechtolsheim and Sam Altman. Feldman has a team of 174 engineers and Taiwan Semiconductor Manufacturing Co. -- Apple Inc.’s chipmaker of choice -- is manufacturing the massive Cerebras processor.Cerebras won’t sell the chips because it’s so difficult to connect and cool such a huge piece of silicon. Instead, the product will offered as part of a new server that will be installed in data centers. The company said it has test systems working at several large potential customers and will start shipping the machines commercially in October.The AI chip market includes Nvidia Corp., Intel Corp. and U.K. startup Graphcore Ltd. Google has been so keen to speed up AI progress that the internet giant developed its own special chips called Tensor Processing Units.Nvidia was the last company to successfully bring new semiconductor technology into servers, the machines that run data centers that Google, Facebook Inc. and others use to run internet services. Nvidia now gets almost $3 billion a year in revenue from the business, which took years and thousands of engineers to build, according to Chief Executive Officer Jensen Huang.“It takes a long time to be successful in data center,” he said in an interview last week.To contact the reporter on this story: Ian King in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Alistair Barr, Mark MilianFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.