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Comment by petra | Hacker News Reader

What happened recently in AMD's market ?

AWS based ARM processor looks to be widely deployed in the cloud.Nvidia, the leader in GPU compute in buying ARM.Intel, which has suffered deeply because of their 10nm fab problems are going to work with TSMC.And AMD's P/E ratio is at 159, higher than Amazon's!

So Maybe AMD is looking to convert some inflated stock with a predictable business.

And it's better to invest in a predictable business that may have possible synergies with yours. Otherwise it looks bad to the stock market.

And Xilinx is probably the biggest company AMD can buy.

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AMD's P/E is high but that's based on the fact that AMD earnings are $390m (2020Q3) vs. $6Bn (2020Q3) for Intel - essentially people are pricing in AMD being the obvious alternative to Intel in the data centre and the potential profit from that is enormous compared to AMD's current market share.

or another way of putting that is investors are jumping the gun and pricing in years and years of expected marketshare growth that haven't happened yet.

it's a relatively safe bet now that intel has more or less conceded leadership through 2023 but it's not zero risk. The market generally doesn't have an appreciation of that, P/E was still nuts even before the release of Zen2 when AMD's success was far less clear (Zen1/Zen+ were far less appealing products and scaled far less well into server class). It's a lot of amateurs (see: r/AMD_Stock on reddit) buying it because they like the company rather than trading on the fundamentals.

Right now the stock market is just nuts in general though, there's so much money from the Fed's injections sloshing around and looking for any productive asset, and tech companies look like a good bet when everyone is stuck at home, building home offices, consuming tech hardware and electronic media. Housing is getting even more weird as well.

I don't know, but I been told... AMD margins aren't great. AMD is making phenomenal products lately but if they're giving them away to gain market share then they may never be as profitable as investors would like.

If Intel gets their house in order in a couple years, AMD won't have much time to gain market and raise prices. I've rooted for AMD since the K6 days but I think there's a risk that they'll always be #2(or less).

They have raised prices for the 5000 series of Ryzen - although they still have a price per performance advantage over intel they're pricing themselves as the market leader.

Yup, in 2020 it's getting the new era of semiconductor industry.

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