|Bid||0.00 x 1300|
|Ask||0.00 x 27000|
|Day's Range||44.80 - 46.63|
|52 Week Range||42.36 - 59.59|
|Beta (3Y Monthly)||0.66|
|PE Ratio (TTM)||10.44|
|Earnings Date||Oct 24, 2019|
|Forward Dividend & Yield||1.26 (2.69%)|
|1y Target Est||53.13|
Shares of Apple and Silicon Valley's semiconductor companies were pummeled on Friday as President Trump responded to new tariffs from China with a tweet saying he's demanding that American companies "immediately start looking for an alternative to China."
AMD stock hit a new 13-year high after the EPYC Rome server CPU launched. How can AMD outperform Intel CPUs at such low prices and still profit?
DOW UPDATE The Dow Jones Industrial Average is slumping Friday afternoon with shares of Apple Inc. and Intel facing the biggest losses for the index. The Dow (DJIA) was most recently trading 582 points (2.
President Donald Trump said on Friday he was ordering U.S. companies to look at ways to close their operations in China and make more of their products in the United States instead, sending U.S. markets down sharply in a new rhetorical strike at Beijing as trade tensions mounted. Trump cannot legally compel U.S. companies to abandon China immediately.
Semiconductor and technology giant Nvidia (NASDAQ:NVDA) has suffered misfortune due to timing issues over the past year or so. In October of last year, the Nvidia stock price disproportionately suffered from the broader market selloff. Then, after going on a convincing recovery rally in the first four months of this year, NVDA fell short.Source: Hairem / Shutterstock.com Part of the reason why is that Advanced Micro Devices (NASDAQ:AMD) started to assert itself fundamentally. Long seen as the smaller sibling in the semiconductor space, AMD has churned out some impressive products. Moreover, they have either matched or exceeded the performance stats of the alpha dog chips.On top of that, we have the escalation of the U.S.-China trade war. Of course, China represents a massive revenue stream for NVDA. For example, earlier this year, management guided down top-line sales expectations due to weak demand from the world's second-biggest economy. With the recent flare-up, the Nvidia stock price has been awfully choppy.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat said, the embattled company released information that should give some hope to stakeholders of Nvidia stock. NVDA Delivers Processing FirepowerArguably, the Nvidia rivalry with AMD isn't as comprehensive as the one AMD has with Intel (NASDAQ:INTC). Nevertheless, where the former pairing has butted heads is in the gaming arena. * 10 Marijuana Stocks That Could See 100% Gains, If Not More As I alluded to earlier, Advanced Micro has made huge strides in their processor offerings. And within the lucrative video game market, AMD's processors have specialized in image sharpening and input lag reduction. The latter involves the time when a player makes an action through the controller, and the response time within a game.Obviously, the shorter the time between input and response, the better. Now, NVDA is claiming that they achieve superior specs with their processor's anti-lag system.In nominal terms, we're talking milliseconds of time save, hardly what you would think is a substantive improvement. Also, it seems like a pretty wonky argument for Nvidia stock.However, video games are big business. And given worldwide trends, industry phenomena like esports will become an even bigger business. Already, we're seeing major sponsorship deals in gaming tournaments. Further, celebrities and pro-athletes have joined in on the fun, bringing in both eyeballs and dollars.Thus, those milliseconds are huge for NVDA. Literally, a gaming tournament can be won or lost on such tiny margins. As ridiculous as it may seem to non-gamers, even a small edge can eventually translate to massive revenue.Granted, we should take anything NVDA says about its own products with a huge grain of salt. However, this time, they might have a point.As our own Will Healy noted about some of AMD's latest processors, they may not work as well as advertised. In fact, several users have complained on message boards and forums that Advanced Micro's Ryzen 3000 doesn't clock in the manufacturer's promised performance stats. Granularity More Critical than Ever for Nvidia StockFor many folks, this might sound like a lot of nerd-speak. Ordinarily, I'd agree with you. However, this processor-performance granularity has significant implications for the Nvidia stock price due to the present context.With the trade war raging, all companies - especially tech firms - are seeking ways to survive a coming downturn. What benefits NVDA stock at this juncture is that video games should turn out to be a fairly recession-resistant industry.Back during the Great Recession, the box office fared very well. Why? Simply put, Hollywood blockbusters offered escapism for a relatively low price. And back in the 1930s during the low days of the Great Depression, movies also brought smiles for cheap.I will argue that the only thing that changed today is the platform. Thus, it's important for Nvidia to assume leadership in this segment. After all, it might turn out to be one of the few areas that we'll see legitimate growth. Enough to Gamble on Nvidia?But is gaming alone enough to take a speculative bite on NVDA stock? Probably not. Instead, what investors should focus on is the cumulative argument.Essentially, Nvidia had to muscle its way into AMD's gaming space because that's where this rivalry is most robust. But in other areas, such as driverless-vehicle technologies or artificial intelligence, Nvidia imposes a more dominant presence.Plus, let's just address the low-hanging fruit. The enterprise value for Nvidia stock is $98.5 billion. For AMD, it's under $35 billion. Thus, push comes to shove, Nvidia simply has more resources to buffer a downturn or recession.Certainly, it's not a comfortable investment given the trade war risks. However, if you're going to bet on a semiconductor, NVDA is it.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Hereas Why a Gamble on Nvidia Stock Might Pay Off appeared first on InvestorPlace.
A vast majority of employees queried at Cisco Systems and several other big Silicon Valley tech employers say they've noticed cost-cutting at work.
(Bloomberg) -- Huawei Technologies Co. expects U.S. export restrictions to reduce annual revenue at its consumer devices business by about $10 billion, as the company is banned from buying American components like semiconductors and software.China’s largest technology company is seeking ways to replace key U.S. suppliers such as Cadence Design Systems Inc. and Synopsys Inc., Deputy Chairman Eric Xu said Friday. The overall damage to the company will be a “little less” than billionaire founder Ren Zhengfei’s initial estimate, Xu added.Huawei is seeking to develop alternatives after coming under intense pressure from the Trump Administration, which has argued its technology represents a security threat. On Friday, it introduced its most powerful artificial intelligence chipset, the Ascend 910, which is poised to rival some of the best offerings from Qualcomm Inc. and Nvidia Corp. Earlier this month, it offered the first glimpse of an in-house software -- HarmonyOS -- that may someday replace Google’s Android.The company is also researching ways to replace chip-design software tools offered by Cadence and Synopsys, Xu told a news briefing in Shenzhen without elaborating. “There were no chip design tools 10 years ago, but the industry still developed chips,” said Xu, who argued that Cadence and Synopsys were not must-haves for design. “Intel started to develop chips in the 1970s, when those companies didn’t exist.”Since May, Huawei has occupied the uncomfortable position of being both an established global brand and a member of the U.S. Entity List, which bars it from trading freely with American suppliers. Despite a series of 90-day reprieves, the latest of which came this week, the uncertainty caused by American sanctions has already cost the company a great deal.Even if Huawei is eventually brought in from the cold, the impact of this summer’s upheaval will be widespread and painful. Already, it reported slower sales growth in the second quarter compared to the first as the ban started to bite, especially into a consumer business encompassing smartphones and laptops. That in turn is accelerating Huawei’s effort to become self-reliant.One area in which the Chinese company is rapidly developing in-house expertise is semiconductors, propelling Beijing’s ambitions of weaning itself off foreign chips. HiSilicon -- Huawei’s chip design subsidiary -- has been developing its capabilities for a long time, and it’s recently grown into the second largest customer (after Apple Inc.) for the world’s biggest chip manufacturing contractor Taiwan Semiconductor Manufacturing Co. Huawei has also elevated the presence of home-grown technologies throughout its product line -- from base stations to smartphones and servers -- as a key step to limiting the damage of the U.S. ban.The Ascend 910 processor unveiled Friday is a show of technological prowess. It will be used for AI model training, and Huawei says it outperforms all existing competition. Xu proclaimed that “without a doubt, it has more computing power than any other AI processor in the world.” The company also unveiled MindSpore, an AI computing framework that -- along with the 910 -- is supposedly twice as fast as Google’s TensorFlow.”The May 16 sanctions incident had no impact on the execution of Huawei’s AI strategy nor commercialization of AI products,” said Xu. “Our R&D project related to AI is building up steadily.”(Updates with Ascend’s specs from the third paragraph)To contact Bloomberg News staff for this story: Gao Yuan in Beijing at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Edwin Chan, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The thesis sounds reasonable enough, on the surface. Advanced Micro Devices (NASDAQ:AMD) is in the midst of a turnaround that's put rivals Intel (NASDAQ:INTC) and Nvidia (NASDAQ:NVDA) on their heels. Therefore, buy AMD stock to plug into the rebirth.Now more than three years -- and more than 1,500% -- into the turnaround though, it may be time to accept a certain reality. That is, Advanced Micro Devices stock may already reflect the full potential of what's to come.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt's not an idea that will prove popular in many circles. The company, and its stock, has more than its fair share of cheerleaders. Many of them are quite vocal.Just run through the number crunching before coming to an unwavering conclusion. The Turnaround is for Real, but …The underlying story has been nothing short of incredible.CEO Lisa Su, who took the helm in 2014, wasn't your typical management executive. She's a techie, first and foremost, earning a PhD in electrical engineering from MIT, and spending most of her career in the engineering and development sliver of the industry.It was just the kind of shake-up the struggling company needed at a time it needed it most. Su has led a sweeping overhaul of the company's product lineup, ultimately driving the AMD stock price from under $2 in early 2016 to more than $30 right now. She's also pushed the company out of the red and back into the black. * 10 Stocks Under $5 to Buy for Fall The next three years may or may not look like the past three years though.Barring a global economic catastrophe, Advanced Micro Devices will continue to grow. Next year's projected 24% sales growth, in fact, seems perfectly reasonable … even impressive.There's a context that takes some of the shine off that outlook though. That is, this year's revenue growth is only on pace to improve a little less than 5%.The bar is set low moving into next year.Perhaps more concerning, 2021's top line is only projected to improve to the tune of a more-modest 13%. That's when Intel is expected to finally launch its first 7-nanometer chips, and presumably other updated hardware that will compare nicely with AMD's tech.That revenue growth will drive even-stronger profit growth, to give credit where it's due. This year's estimated earnings of 63 cents per share of AMD stock should swell to $1.06 in 2020, and then grow to $1.29 the year after that. But, those numbers still leave behind a significant valuation challenge. AMD Stock has a Valuation ProblemAdmittedly, it's tough to look past the math when the underlying story is so compelling. Nothing lasts forever though, particularly when the trajectory of a stock's rally is considerably sharper than the trajectory of that company's results.Said in simpler terms, Advanced Micro Devices stock has continued to rise when it arguably shouldn't have.Even pushing the analysis out to 2021's expected revenue of $9.5 billion and earnings of $1.29 per share, AMD stock is trading at a forward price/sales ratio of 3.6x, and a forward price/earnings ratio of 24.4x. And again, that's two years down the road. Those valuation measures are rich for most other tech stocks using expectations just one year ahead. * 10 Undervalued Stocks With Breakout Potential For perspective, NVDA stock is priced at 24.0 times next year's earnings estimates, while INTC stock is valued at 10.6 times 2020's projected income. Intel shares are also only priced at three times next year's expected revenue. Bottom Line on Advanced Micro Devices StockIt's not that nobody sees the looming headwind facing Advanced Micro Devices stock. Analysts see it quite clearly.Although meteoric rallies would often induce the professionals to up their price targets and catch the next leg of a persistent advance, they're decidedly not doing so in this case. The current consensus target of $33.18 is only 5% better than the current AMD stock price near $31.50. That's a 12-month target too, and not a current valuation measure.As Piper Jaffrey's Harsh Kumar said, "Given the stock's recent appreciation … and the current macro/geopolitical environment, we see the stock as more or less fully valued."It's investors who are choosing not to see the fact that the bulk of AMD's turnaround is already priced in. And in this case, it's these individual investors in charge of setting the market price. They're still basing it on the past rather than the plausible future.Bottom line? Just be careful. This game of musical chairs could be ending soon, leaving some unsuspecting traders without a seat.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Like it or Not, AMD Stock Has a Valuation Problem appeared first on InvestorPlace.
The Hot Chips 31 Symposium started this week. Artificial intelligence was the hot topic among participants Intel, NVIDIA, and Advanced Micro Devices.
As I have recently written, Advanced Micro Devices (NASDAQ:AMD) stock has been on a tear in the past few years. AMD stock price is up more than 600% since 2016. There are plenty of fundamental justifications for the move, but that doesn't mean the stock is a buy.Source: Casimiro PT / Shutterstock.com Piper Jaffray analyst Harsh Kumar initiated coverage of Advanced Micro Devices stock this week with a "neutral" rating. Kumar made a similar argument I made in June about why investors should stay away from AMD stock. AMD Stock Priced For PerfectionAMD has accomplished a lot of things in the past several years. It's EPYC, Ryzen and Radeon product launches have been tremendous successes. It's even gaining meaningful market share from Intel (NASDAQ:INTC). Unfortunately, all these developments and all of the near-term catalysts for AMD stock are already priced in.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Marijuana Stocks That Could See 100% Gains, If Not More "We view the company's product positioning and financial leverage favorably, but given the stock's recent appreciation (+69% YTD vs. SOX +28% YTD) and the current macro/geopolitical environment, we see the stock as more or less fully valued," Kumar says.AMD launched its EPYC Rome 7nm chips in August. The first Rome numbers will be reported in the third-quarter. But with the stock up another 78% year-to-date, it's hard to argue that catalyst isn't already priced in. More market share gains from Intel are likely also priced in. That doesn't mean those developments aren't bullish for AMD as a company. It just means they likely won't move the stock significantly higher for at least another couple of quarters."With the recent ROME announcement, we see the products' optimism fully priced-in as we move into the second half of the year," Kumar says. Advanced Micro Devices Stock Has Too Many RisksThe single-biggest risk to AMD stock is its valuation. AMD shares trade at a forward earnings multiple approaching 30. It's not outlandishly high, but there's likely not much room for expansion. That multiple is assuming AMD hits all its growth targets and impresses with its Rome chips. It also assumes Intel continues to drop the ball and hand over business to AMD.AMD shares trade at a PEG ratio of 4.5 and a price-to-sales ratio of 5.6. Given the external risks AMD is facing, that's a pretty full valuation.The single biggest near-term threat to Advanced Micro Devices stock is the U.S. trade war with China. AMD revenue was down 13% last quarter. The company said the trade war will likely weigh on numbers in the second half of 2019. About 30% of AMD's revenue comes from China.U.S. President Donald Trump has shown no intention of backing down on the trade war. Even if AMD is not directly targeted by China, any slowdown in China's economy could hurt AMD's business and share price.Finally, as I have said before, AMD beating Intel to the punch by launching its 7nm node products while Intel struggles with 10nm node launch is a bit of a David versus Goliath story. Sports fans know there can be some major upsets when the stars properly align on a particular day. But investors can't expect the underdog to keep winning every game. Intel has superior scale and resources. AMD's window of opportunity is closing fast. Whenever Intel finally gets its act together, it will come back with a vengeance. AMD Stock Investors Should Be PatientIn a nutshell, AMD has been one of the most impressive companies and stocks on Wall Street in the past few years. Everything it has touched has turned to gold. Shareholders have been rewarded for this Midas touch. But at this point, expectations are too high and risks are too plentiful to be buying the stock at nearly 30x forward earnings.AMD has always been a volatile stock. Investors can expect more of the same volatility in coming months even if the fundamental picture for the company doesn't shift much.As Kumar pointed out, AMD stock has dipped below a forward PE of 30x several times in the past two years. Even if you are a long-term bull, there will likely be a better opportunity to buy the stock at some point in the next year. The long-term bullish catalysts for AMD stock will play out over a period of years, not months. I would recommend staying on the sidelines for now and watching for the next 10% to 20% pullback in AMD stock.As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Now Is Not the Time to Buy Advanced Micro Devices Stock appeared first on InvestorPlace.
Lisa Su, CEO of Advanced Micro Devices (NASDAQ:AMD) has vehemently denied the rumor that she is leaving the company she's run since October 2014 to become the chief executive of IBM (NYSE:IBM). If she did, however, it would be terrible news for owners of AMD stock but great news for IBM shareholders. Source: Casimiro PT / Shutterstock.com Here's why. The Rumor's GenesisBefore I get into the reasons why AMD stock would suffer greatly without Su, let's consider how and why the rumor got started in the first place. InvestorPlace - Stock Market News, Stock Advice & Trading TipsAn article appeared on wccftech August 6 that suggested the CEO was considering leaving Advanced Micro Devices to become IBM CEO Ginni Rometty's second in command, eventually moving up to the top role. * 8 Biotech Stocks to Watch After the Q2 Earnings Season The author, Usman Pirzada, suggested that recent AMD hire Rick Bergman, the former CEO of Synaptics (NASDAQ:SYNA), is being groomed for a quick ascension to the top job. Pirzada puts Su's departure toward the end of 2019, perhaps into 2020, giving Bergman several months to familiarize himself with AMDBergman, who's currently in charge of AMD's PC and Semi-Custom business, spent several years working at the company before moving to Synaptics in October 2011. As a result, he shouldn't have any difficulty adapting to the changes Su's made since taking the helm.According to Pirzada's sources, the negotiations for Su to join IBM have been underway for some time. The DenialSu, of course, denies she's leaving the chipmaker."Just for the record, zero truth to this rumor. I love @amd and the best is yet to come!," the CEO tweeted August 6. The scuttlebutt in the tweets following Su's denial is that Intel (NASDAQ:INTC) was somehow responsible for the bad intel (no pun intended). I wouldn't hazard a guess if that's remotely true. Needless to say, the thought of Su taking the reins at IBM should have Big Blue's shareholders praying the rumor's not a dud. I've been fairly negative about IBM in recent times so a move to hire someone of Su's caliber to replace Ginni Rometty as CEO would absolutely be the tonic it needs to reignite its growth on both the top and bottom line. However, as exciting as the speculation is for IBM shareholders, Business Insider's assertion that Red Hat CEO Jim Whitehurst is Rometty's likely successor makes total sense. Whitehurst is only 52 years old, nine years younger than Rometty, and in the prime of his CEO career. Furthermore, IBM just spent $34 billion to buy Red Hat, easily its most expensive acquisition in the company's long and storied history. It's not going to let its future get away from it, no matter how attractive another candidate might be. The Loss of Su Would Be ExtremeSeeking Alpha contributor Kwan-Chen Ma recently estimated that Lisa Su's value to AMD stock is worth at least 20%-30% of its market cap. Today, as I write this, the AMD stock price is $31.25, up 66% year to date through August 20, and 48% on an annualized basis over the past five years, approximately the same duration as Su's leadership. So, if Ma's estimate is remotely close to accurate, we're talking about Su's value to the company being in the neighborhood of $7-10 billion. To lose her to IBM of all companies would put a massive dent in the Advanced Micro Devices stock price. I could see a $6 single-day-loss on the news. Of course, Su's denial must be taken at face value. She's always been open with the investment and tech media since taking the top job. And news of a $25 million long-term retention bonus definitely tips the scales in AMD's favor. It also lends credence to the rumor, as it was filed with the SEC on August 5 -- the day before the original story and Su's tweet.But if she did leave, AMD's loss would definitely be IBM's gain. AMD Stock Moving ForwardInvestorPlace's Josh Enomoto discussed the rumor soon after it hit the internet. He believes Su would be crazy to not make the jump to IBM. "If she [Su] continues to stay on board, she likely has minimal upside potential and serious downside risks. Since we're heading toward a U.S.-China abyss, I'd say the upside is almost nonexistent," Josh wrote August 8. "But with IBM, it's all upside for Su. 'Big Blue' is on the outside looking in. They know they're in for an uphill climb and are willing to put maximum effort to accomplish their goals. Even Su's mere presence would be a lift for IBM."I couldn't agree more. AMD stock has made gargantuan gains in 2019. The odds of doing the same in 2020 are low. If Su leaves, you can expect a major correction until Bergman can right the ship. * 10 Marijuana Stocks That Could See 100% Gains, If Not More Su's left a nice legacy for AMD. Moving on after five years is the smart thing to do. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Losing Lisa Su Would Be a Terrible for AMD (and AMD Stock) -- But a Big Win for IBM appeared first on InvestorPlace.
Currently, the global market is a mess. Investors want more conservative dividend stocks in defensive sectors like consumer staples and utilities.
At its heart, the argument over Micron Technology (NASDAQ:MU) is a battle over how to value a cyclical stock. It's not an easy task. In a matter of quarters, the MU stock price went from being absurdly cheap -- Micron stock traded at less than 4x earnings at points last year -- to questionably expensive. Fiscal 2020 consensus EPS is just $2.53, implying a 17.5x forward P/E that's not all that attractive in the context of the semiconductor sector.Source: Charles Knowles / Shutterstock.com Even Wall Street can't make up its mind. As Barron's noted last week, analyst targets for the MU stock price range from $28 to $90. It's a company that earned $12+ in adjusted EPS in fiscal 2018, posted a $1 per share loss as recently as FY12, and is expected to see a two-year, approximately 80% decline in EPS in FY20. * 10 Marijuana Stocks That Could See 100% Gains, If Not More In terms of that argument, I wrote recently that I lean toward the bearish side. The recent rally in Micron stock looks ripe for profit-taking. Earnings may not be set to rebound any time soon. And I thought the Q3 report that sent the MU stock price skyrocketing was much weaker than headlines suggested.InvestorPlace - Stock Market News, Stock Advice & Trading TipsCyclical arguments aside, however, there's a risk to MU shares that might not be fully appreciated at the moment. Micron is exposed to the U.S.-China trade war in a way that goes beyond the standard macro exposure of most semiconductor stocks. News on that front thus is likely to create volatility in Micron stock in the near term. And if the news winds up being as bad as it appears, it could send MU shares back toward recent lows. The Huawei Problem for Micron StockThe Trump Administration has made a clear target of Chinese telecom equipment manufacturer Huawei. The White House effectively blacklisted the company earlier this year, citing security concerns. President Donald Trump himself said this week that he wasn't interested in allowing Huawei "to do business at all" with American companies, though the federal government soon after gave Huawei another 90-day extension.Huawei's tenuous status has been an issue for tech stocks, and particularly semiconductor stocks, for some time. Companies like Broadcom (NASDAQ:AVGO), Qorvo (NASDAQ:QRVO), and Intel (NASDAQ:INTC) all have seen revenue hits from ceasing or moderating sales to the networking giant. Micron's rival Western Digital (NASDAQ:WDC) announced in June that it had stopped doing business with the Chinese company altogether.For Micron, Huawei is a key customer. Per its 10-Q, 13% of revenue for the first three quarters of fiscal 2019 came from Huawei. And that's with lower-than-expected revenue so far this year to begin with. On its Q3 conference call, the company cited a $200 million impact to revenue in the quarter. Q4 guidance -- which was disappointing relative to expectations -- also took a hit. And the company wrote down $40 million in Huawei-related inventory. Lower Earnings Mean a Lower MU Stock PriceThe problem for Micron is that 13% of revenue doesn't necessarily mean 13% of profits. One only need look at YTD results to see that lower sales have a huge impact on earnings.Through the first three quarters, revenue is down over 15%. Adjusted EPS has declined 32% with a lower share count.Admittedly, lower DRAM and NAND memory pricing is a big factor. But losing 13% of revenue off roughly similar expense bases in R&D and G&A tends to depress margins and lead to amplified reductions in profit.In other words, this is a big risk for Micron stock. How Does This Play Out?To be fair, a permanent Huawei blacklist doesn't necessarily mean Micron's revenue will fall by 13%. As CEO Sanjay Malhotra noted on the Q3 call, Micron supplies Huawei rivals as well (presumably including Nokia (NYSE:NOK) and Ericsson (NASDAQ:ERIC). Those rivals would take market share ceded by Huawei -- and add to their purchases of memory from Micron.But it's still unclear that European countries, in particular, are going to follow the U.S. lead in banning the Chinese equipment maker. There will be some erosion if the U.S. moves forward in preventing its companies from selling to that company.It's also possible that, at some point, the ban will be lifted. The administration could be using Huawei as a bargaining chip. A broader trade war deal could include accommodation from Huawei, and any sort of resolution likely would move chip stocks, including Micron stock, higher.But such a resolution seems a long way off at this point. In the meantime, Micron earnings are likely to decline, and the MU stock price may well follow suit. Between cyclical risk and political risk, there are plenty of reasons to stay on the sidelines here. Even bulls might want to show some patience and see if geopolitical factors don't present a better entry point.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Mind the Huawei Risk When It Comes to the MU Stock Price appeared first on InvestorPlace.
Advanced Micro Devices (NASDAQ:AMD) stock trades in a no man's land. The equity made a dramatic and deserved comeback under CEO Lisa Su. Now it holds a market lead over Intel (NASDAQ:INTC) and has become a competitive threat to rival Nvidia (NASDAQ:NVDA).Source: Grzegorz Czapski / Shutterstock.com However, headwinds from within the company and the macro economy could mean that AMD stock will struggle to gain traction for the foreseeable future. The $34 Ceiling HoldsFew can deny the dramatic turnaround AMD stock has made under Lisa Su. She has taken AMD from a company struggling for survival to one that has leaped ahead of archrival Intel by years. The company's 7nm Rome processor launched on August 7 amid an environment where Intel struggles to release a 10nm Xeon processor.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe biggest problem I see for Advanced Micro Devices stock is the one I mentioned before earnings--the $34 per share price ceiling. Earnings of 8 cents per share saw the company meet estimates on a non-GAAP basis. From a GAAP standpoint, earnings of 3 cents per share actually fell short of expectations by a penny per share. Quarterly revenues of $1.53 billion beat estimates by a relatively modest $10 million. * 10 Marijuana Stocks to Ride High on the Farm Bill Due to this lackluster report, the $34 per share price ceiling held firm. The AMD stock price fell below $28 per share by August 5. Three days later, news that Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) would use AMD processors for Google Cloud quickly sent it back to the $34 price ceiling. Unfortunately for bulls, that limit held again, and now, Advanced Micro Devices stock trades at under $32 per share.From a fundamental standpoint, Advanced Micro's inability to go to $35 per share and beyond seems hard to understand. AMD stock currently trades at a forward price-earnings (PE) ratio of around 29. While not cheap from an S&P 500 standpoint, it seems a little low for a semiconductor stock at the top of its game.Investors might recall that Nvidia traded at over 50-times earnings before the fall 2018 stock selloff. Moreover, Wall Street estimates profit growth of 37% for the current fiscal year and 68.3% the next. Investors have often paid much higher multiples for lower growth. AMD Faces Internal and Macro HeadwindsStill, despite AMD stock appearing inexpensive, I would wait until the $34 price ceiling breaks before buying it. For one, some have cast doubts that AMD's Ryzen chip works as fast as advertised. Despite this news, AMD still maintains a wide lead over Intel. However, this may also indicate that AMD has some work to do on this chip. Such news could dampen confidence in Advanced Micro Devices stock.Moreover, AMD stock could also become the victim of macro headwinds. AMD first achieved its multi-year high of around $34 per share in September 2018. During last year's fall season, the selloff wiped out more than half of its value before the recovery earlier this year.Now, the yield curve has inverted, indicating that a recession may come soon. I do not think this changes the long-term bull thesis on AMD. However, it could lower revenues in the near term. Also, in such an environment, investors tend to show a lower tolerance for high multiples.Furthermore, the continuing trade war with China creates further concerns. As Faisal Humayan points out, China accounts for about 30% of AMD's business. This places in doubt the company's ability to do business with Chinese tech giant Huawei. For now, the Trump administration has lifted restrictions. However, it should surprise nobody if this Huawei ban gets reinstated. The Bottom Line on AMD StockThough AMD will remain a force in the semi industry, investors should avoid Advanced Micro Devices stock for now. Usually, I would encourage investors to buy an equity in AMD's position. A forward PE of 29 and profit growth north of 30% typically seems like a reasonable bet. Moreover, its lead over arch-nemesis Intel should bode well for the company.However, the inability of AMD stock to stay above $34 per share limits the potential for near-term gains. Furthermore, lower-than-advertised speeds for the Rome processor could put pressure on shares as the company addresses this issue. Finally, macroeconomic conditions such as a possible recession and an extended trade war could dull the appetite for equities across the board.AMD is a long-term winner, and the $34 per share price ceiling cannot hold forever mathematically. However, as long as it remains intact, AMD stock is only a buy at a significantly lower or higher price.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 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 The $34 Price Ceiling Still Blocks the Growth of AMD Stock appeared first on InvestorPlace.
Nvidia (NASDAQ:NVDA) has pleased investors with its latest earnings report. Nvidia stock traded sharply higher to close the week, with shares advancing more than 7%. The sector also got help with peer Applied Materials (NASDAQ:AMAT) posting solid earnings as well.Source: Hairem / Shutterstock.com How much will this earnings report matter to Nvidia's longer-term trajectory, however? I argue that these results will do little to shake Nvidia out of its recent funk. As we'll see, Nvidia is making the best of a bad macroeconomic environment. But make no mistake, it will be hard for NVDA stock to rally given the factors that are outside of its control. Gaming Powers a Solid QuarterFor the second quarter, Nvidia beat both earnings and revenues estimates. Revenues topped expectations by a fairly modest $40 million, however, earnings came in hot at $1.24 against the market's outlook for just $1.15 per share. As you might have guessed, the big earnings beat came largely from stronger profit margins rather than better than expected sales.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Undervalued Stocks With Breakout Potential The stronger profit margins line up with another encouraging trend: declining inventories. Nvidia's inventories fell to $1.2 billion from $1.43 billion previously.Importantly, Days Sales of Inventory "DSI", a metric that tracks how many days of inventory a company has ready to go, plummeted from 140 to 106. This indicates that conditions within the industry appear to be returning toward average and that the chip glut is largely behind us.Nvidia scored big in gaming in particular. It pulled in more than $1.3 billion in gaming revenues for the quarter. Yes, that figure still slumped 27% from the same quarter last year. But it rebounded 24% from the previous quarter of 2019 as Nvidia notched record gaming laptop sales and launched new product lines for desktop gamers, and video creators.Nvidia expects this positive momentum to continue as a line of highly-anticipated games using ray tracing technology. This should push consumers to upgrade to the latest available Nvidia chips. Not All Great News, HoweverApart from gaming, however, there were significant weaknesses for Nvidia. For one thing, data center revenue rose just 3% sequentially and is still down double digits from last year. Management sees continued weakness in spending trends from large customers.And let's back up for a minute. Nvidia set a really low bar going into this quarter. Sure, they managed to beat guidance, but guidance was atrocious. We're still looking at huge drops in both data center and gaming revenues from last year. Competition from the likes of AMD (NASDAQ:AMD) is clearly pressuring Nvidia's prospects.Going forward, Nvidia posted lower guidance than analysts had expected. Bulls had been hoping for a big gaming turnaround this quarter and that leading to forward momentum going forward.Gaming turned up, but not enough to lift Nvidia's overall prospects. Without things looking a lot better from auto and data centers, NVDA stock will at best chop around if not resume going downward. Nvidia Faces Serious HeadwindsThe elephant in the room remains the trade war. Numerous semiconductor companies have reported that the trade freeze has hit demand. Clearly, it's put a damper on results for both Nvidia and competition such as AMD and Intel (NASDAQ:INTC) as well. And the trade war appears to be escalating, witness all the concerns about the Yuan slumping earlier this month.Combine that with more weak guidance from Nvidia, and the outlook for NVDA stock simply isn't good. You have to suspect that analysts are going to lower their revenue and EPS outlooks for 2020 in the coming weeks now.Without growth in data center or spectacular results from auto, there's really not much to get excited about.The gaming revenues are good. That's a solid step for NVDA stock. But shares are still trading at more than 8x sales. You'd normally mark a semiconductor company like this closer to 5x sales, which would put NVDA stock down around $90 to $100 per share.Nvidia investors have priced a whole lot of growth ( along with higher profit margins) from emerging product lines into Nvidia's stock price. This quarter did little to back up those optimistic assumptions. Nvidia Stock VerdictNvidia has been trading in a narrowing range in recent months. On numerous occasions, Nvidia stock has found support between $130 and $150 per share. On the upside, it made a decent run to try to get back over $200 in April, but each subsequent rally has been weaker and weaker.Will Nvidia be able to get out of its declining trading range and resume making gains? While this earnings report certainly was a positive, it's not a game-changer for the firm.Nvidia stock investors don't have to worry about the share price plunging to new lows just yet. But don't expect this earnings rally to be the start of anything much until the trade war is resolved and the company can raise guidance again.At the time of this writing, Ian Bezek owned INTC stock. You can reach him on Twitter at @irbezek. 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 This Earnings Pop Is a Great Opportunity to Start Dumping Nvidia Stock appeared first on InvestorPlace.
The companies plan to open a 5G innovation lab and incubator based at T-Mobile's Bellevue headquarters, according to an application filed with the state of Washington.
Intel's (INTC) first AI-chip to facilitate companies having higher workloads with accelerated inference. Notably, Facebook is already utilizing the chip.
The following is an opinion editorial by Lorie Wigle of Intel Corporation. Whether running on your own servers on-prem, in an edge deployment, or in the heart of a cloud service provider’s data center, this “in-use” data is almost always unencrypted and potentially vulnerable. Intel’s commitment to helping customers and the ecosystem at large with data protection is why we and other industry leaders are coming together to form a new Confidential Computing Consortium under the Linux Foundation.