AMD passes Intel in market cap
cnbc.com
cnbc.com
Intel knows this and is trying to become the TSMC of the west. And frankly they're the only ones that can pull it off. I'd be surprised if 10 years from now the majority of their revenue comes from selling processors rather than fabricating them for AMD, NVIDIA, etc. Why compete when there's plenty of steak for everyone?
It's more like an increasingly active volcano. It might not blow up tomorrow, but if you deliberately built a house on its edges, it would be hard to sympathize with you when it finally does go kaput.
If you think there’s a X% chance of this happening, and that this event will be the catalyst for intel’s value appreciating by Y% of TSMC’s market cap, you can value the opportunity cost of investing in intel in the interim as a (dividend-paying) insurance premium covering your TSMC position.
If it never comes to pass, at least you earned a dividend. If you think Intel’s valuation has hit a trough, it’s both a good investment and a lot cheaper than a put option.
Computer chips are in general a reliable hardware, and top-of-the-line CPUs are in general way more powerful than needed, so there is no need for cutting-edge manufacturing and also an embargo won't halt existing activities.
Simpler/embedded processors seem to be a generic product that can be manufactured by many countries, hindering embargo efforts.
Are chips more critical for a country than e.g. food? because many countries are not nutritionally self-sufficient.
Strategic risks such as war, invasions, sanctions, etc. have to be dealt with on a decadal basis.
You have to ask: what's the current reality, and what's the trend?
The trend is pretty clear: our world is going to depend more on computers, not less. You have to prepare for a world where drones have replaced your fighter jets, where every citizen has a smartphone, and where your financial system will collapse without working computers and servers.
That sounds a lot like the present.
Saying they're committed to fabricating in the US while they are, for the first time, relying on other companies to make chips for them over seas... right now their domestic fabrication may internally be viewed as a blunder.
Sure it could pan out for them but it's a crap shoot. Maybe those blunders were just all bad leadership which Intel has recovered from, only time will tell.
> whatever is gong on with 10nm
The modern 'nanometer system' is nothing more than a bizarre versioning scheme (specifically its usually the 'major' portion of a semver), and you wouldn't be able to identify a physical thing to measure to compare different fabs.
Intel wouldn't have been competitive if they were still on their own 14nm process.
Reminds me of Facebook actually - if you tell the people who build your core product that they're lame, they're goign to leave, and your core business will fail.
Doing so needs not only huge amounts of investment but a massive change in the business model and by all accounts culture. Neither of these are a given at all.
They seem to prefer dividend payouts rather than capex on new fabs[1]. Combined with them moving to FCF loss - I think that what you described here may be imaginary at best.
Given what they said in the last earnings call, a slow IBM-like death seems more likely.
1: https://semianalysis.com/intel-cuts-fab-buildout-by-4b-to-pa...
It seems pretty clear that most firms will just go where the bang/buck is (especially ones like AMD and Nvidia where performance is top priority) irrespective of geopolitics. If intel can't attract the right clients then it might make their extra fab capacity in the US economically tricky to maintain.
I could have made maybe 20x on my investment... Still, I don't feel regret. You can only regret things if you had a choice and I know that there's no way I could have avoided selling those shares.
People made it big on AMD and Nvidia because they got lucky by owning the players who profited from the shakeup that cloud computing and ML brought to the industry. If you told someone 15 years ago that companies would be buying clusters of Nvidia GPUs for $100s of thousands of bucks, I doubt many people would believe it.
Intel certainly isn't a bad buy right now. Lots of things could happen and the industry will certainly look a lot different in 20 years. I can see a path where they manage to out-maneuver everyone else, but I think it's just as likely that they go the way of other major players.
It’s gambling indeed, even if lightly informed.
So yes, Tesla is actually worth whatever the market cap is.
I have no horse in the game (no Tesla nor any other automotive stocks) but we’ve definitely seen companies being massively overvalued in the past and then face fierce correction - AOL was once worth $222 billion and later (not even that much later) sold for less than 1% of that.
First, my understanding is that Tesla has a night and day lead in battery sourcing.
Second, Tesla doesn’t have the legacy costs that the others do.
Also, at this point, Tesla is still selling cars faster than they can build them. Even if demand weakens, they may still be at max output.
They have a factory where Panasonic employees come in and make batteries for them (a little glib, but not that far off), but aside from that they really don't have some secret sauce that we know about. They are putting CATL batteries in their cars just like everyone else and they don't have any mining or refining operational unlike BYD. Their battery research and production is massively behind schedule and the future of the Model 3, Y, and Cybertruck all depend on volume 4680 production which is behind at Panasonic as well.
Ford has the supply for 400,000 EVs lined up between now and 2024 and Volkswagen has the supply to outproduce Tesla in 2024. BYD is already producing more PHEV/BEV than Tesla, and if there is a solid-state breakthrough it won't be happening at Tesla.
The stock market is routinely “mistaken” and stocks get overhyped and then crash down later (or vice versa). It’s not some omniscient deity that’s never wrong (except in a very literal and impractical way of looking at it).
First of, Tesla is buying massively from Panasonic, LG and CATL. They are also doing their own batteries in addition to that. The production of that is behind schedule, but not that far, and I can believe how little credit Tesla is getting for literally turning into a battery company over just a few years. Their batteries are gone give them a huge advantage in margin.
> depend on volume 4680 production which is behind at Panasonic as well
Tesla 4680 have nothing to do with Panasonic. Panasonic is also gone make 4680 format cells for Tesla, but those are totally different and have nothing to do with the cells currently shipping from Texas.
> Ford has the supply for 400,000 EVs lined up
Tesla makes that many in less then 6 month. And there is a large difference between signing a supply agreement and actually getting it. The lithium industry had scaling problems and pretty much all expert suggest a shortage is coming.
For Ford to get all those materials, it requires a huge number of supply expedition projects to go correctly and that is not at all guaranteed.
For until a few years ago didn't even believe that had to worry about batteries or battery materials at all. And since then they have done a 180 and try to tell everybody how EV focused and smart they are, when in-fact they are behind the curve.
> Volkswagen has the supply to outproduce Tesla in 2024
Not sure where you got this from, but its false.
> BYD is already producing more PHEV/BEV than Tesla
Nice that you snuck PHEV in-there. But yeah BYD is a great company, but their cars are mostly China only.
> if there is a solid-state breakthrough it won't be happening at Tesla.
Solid stage or rather what people actually mean by that, lithium anodes, is not inherently superior to silicon anodes. Andt Tesla has some of the most interesting research in that direction.
Also solid state will not really be relevant in the BEV space for many years to come.
i.e. competing with everyone else for the same pie
> I can believe how little credit Tesla is getting for literally turning into a battery company over just a few years. Their batteries are gone give them a huge advantage in margin.
Probably because they aren't a very good battery company yet. they haven't even started mining or refining their own lithium, and they have yet to volume produce their own chemistry.
> Tesla makes that many in less then 6 month. And there is a large difference between signing a supply agreement and actually getting it. The lithium industry had scaling problems and pretty much all expert suggest a shortage is coming.
Tesla will have the exact same problem given they have no mining or refining operations. Even if their volume production goes well they will be fighting over the same lithium as everyone else.
> For Ford to get all those materials, it requires a huge number of supply expedition projects to go correctly and that is not at all guaranteed.
My understanding is that those supplies are pretty much entirely from 3rd party suppliers and don't include their in-house battery production which is slated to start later. But hey, maybe they lied to investors about the supply and if so they will pay the price.
> Not sure where you got this from, but its false.
Bloomberg Intelligence, and the actual claim is that they will outproduce them, not just have the supply to: https://www.bloomberg.com/company/press/volkswagen-to-overta...
> Andt Tesla has some of the most interesting research in that direction.
I will believe it when I see anything from battery day 2020 materialize.
i.e. being a Top 2 most important costumer of every major battery company.
> they haven't even started mining or refining their own lithium
Almost no battery company does that.
> Bloomberg Intelligence
They apparently disagree with most other people who look at that space. I'm willing to bet 5000$ even odds with you if you on whether VW outsells Tesla in terms of BEV by 2024.
> I will believe it when I see anything from battery day 2020 materialize.
Many things are already in the 4680 cells and you seem to believe all those solid state companies who have never achieved anything.
I've also heard the argument that Tesla's network of chargers brings more value, but...there will also be more competitors in that space in the near future (and today).
So, it seems shortsighted to believe that "market cap" is going to remain as high as it is today.
There is no true value set by Buddha, Buffet, Robinhood, or ML.
There are many EV that came out that most people don't know much about since they were not produced in large numbers.
And we should also consider that the battery space is running into material shortages and Tesla had the longest to prepare for that and are the largest buyer of battery materials/batteries on the plant.
Other companies might want to sell more EV, but they will literally not be able to.
I mean in theory. In practice:
- You have to use a very specialised definition of "we". Specifically, it's what people think, weighted by how much money they control. So wealthy people have an outsized say in market cap. Controllers of hedge funds, pension funds, etc an even more outsized say.
- People's pricing can be based on how they expect other people to price the stock in the future rather than how much they think it is truly worth based on the fundamentals of the business. If someone's price is based on this, then it is no longer a reflection of how much they think it's worth.
1) I'm confident that in the long term, company X will grow in value. I invest $1000 and will wait however long it will take, 10 or more years. I risk these $1000 only, but can earn multiple of it.
2) I'm confident that in the long term, company Y will decrease in value. I can short it with $1000, however either I risk much more than $1000 or I can't set the timeframe (because of forced liquidation). I also can't earn more than $1000. In the long term, I'm also exposed to inflation. Effectively, it's possible to short only in a short timescale, which is super risky.
The two betting options are very asymmetric, which IMHO favors overvaluation of certain hyped stocks, since there's no reasonable (not extremely risky) way to bet against them.
the market can stay crazy lobger than you can stay solvent.
You losses in shorting are unlimited. Every i vestor from Warren Buffet to my dog strongly advises against shorting
Buy puts.
> Every i vestor from Warren Buffet to my dog strongly advises against shorting
If you are not sophisticated enough to take a short position, you are probably not sophisticated enough to buy a specific equity. This is true of essentially everyone who does not invest professionally, including myself.
The house analogy is a helpful one. Let's say I buy a million dollar house but I only have $100K of equity in it so far. My market cap is $100K and my debt is $900K. I'd argue that the house is still worth a million dollars.
This is important here since Tesla has much less debt vs. the rest of the auto industry.
Your house analogy and the way you explained it does not make sense to me. Since market cap is what the market is saying a company is worth, it isn’t right to equate that to the “$100k of equity” in your example house. It’s more correct to equate it to the $1 million value the house has.
Right now GM has an enterprise value of $130B. That means it's expected to spit out $130B of cash over its lifetime (discounted to a present day value). But the market cap is only $50B. Meaning $80B of that future cash will go to GM's lenders.
It of course feels super counter-intuitive to add debt (which feels like it should be a negative) to the valuation. But I always felt the house analogy gives an intuitive everyday example.
When you discover the second variable, you might also discover that Tesla’s ‘Equity Market Cap’ makes a lot more sense vis a vis the other top auto manufacturers based on the scale of that other variable in the valuation equation for those other companies.
LOL, it's Tesla that is way behind in manufacturing. They had trouble hitting their production targets, and they still have quality problems. Toyota/Volkswagen etc will have zero trouble switching their production lines to electric cars, and when they do they will manufacture cheaper, faster, and better.
> old supply chains to wind down, new supply chains to wind up
Again, advantage at putting together supply chains is with traditional manufacturers, because of their experience.
EDIT: Tesla seems to have problems even hiring workers for their factory in Berlin, never heard of any German manufacturer having similar problem.
I hope they do figure it out...
The latter reason means that even the market as a whole might not actually believe in the current market cap, in the long term.
I'm personally super skeptical of this market cap. I've been renting a Tesla Model 3 the last couple weeks. It's an awesome car that I would recommend to anyone. When you first drive it you can appreciate what a good job Tesla have done to make it feel like a car from the future. But at the end of the day it's a car. It's got lots of small flaws too, and the self-driving features have scared the shit out of me due to errors they made more than a few times already.
Based on this experience it seems completely implausible that Tesla will be able to keep up this "car from the future" experience for very long. How? They're not a leader in self driving, and even if they were, why would they remain so indefinitely? What other innovations would justify this image? People will get used to electric vehicles very quickly, that won't feel new anymore before long.
If you talk about how cars are built, all auto manufactures seem to follow the same basic model to build cars, robotic welded bodies, a mix of manual and robotic paint and a moving assembly line to put the rest on - everyone does it the same way with some minor variations. Similarly Toyotas JIT supply system is used the world over by all auto manufacturers because it improves the balance sheet.
I honestly don't see that it's difficult for ICE manufacturers to compete in the EV space. We're seeing most ICE companies at least dipping their toes into the EV space, and in some cases they're going all in (Hyundai/Kia, VW, for example) and offering strong alternatives to Tesla.
Compare a state-of-the-art BMW plant to any Tesla plant. Modern auto OEMs have been full automation for a long time.
* Yes, something is worth what someone is willing to pay. But we know Mr market is temperamental and irrational, so really what I'm saying is, in the long term / low pass filtered version, do we really think Tesla is worth more than the next 10.
* Re anecdotes in which market cap is correct - this doesn't prove anything. E.g. a random number would be correct some of the time also.
The next 5 years are critical for the existing players and many will shrink dramatically or go bankrupt. People already know this and that is why there is a bill in Congress that is a stealth bailout of the domestic auto industry with a $7500 tax credit on cars that have just $750 worth of batteries in them.
The big three domestic manufacturers largely shed their pension liabilities to the UAW when they last went (or nearly went in the case of Ford) bankrupt in 2008.
Tesla's margins shrunk quite a bit last earnings report, so I agree. Selling high-end cars in a niche market is easier than selling 20 million cars annually (which no one has ever done before).
There's just over 30m seconds in a year, that's a car every second and a half. That seems like it would take a lot of assembly lines to pull off ignoring other constraints.
On the other hand, at 184.8″ for a model 3, that's like a stream of them bumper to bumper leaving a single assembly line at 6.65 Mph for the entire year. Viewed in that light, maybe it doesn't take that many assembly lines to reach a speed at which this would be achievable, ignoring other very important constraints. (Or maybe I made a mistake in my math.)
People already see some value in Teslas self-driving technology. And that value will continue to go up for a long time.
You are aware that real self driving(L5) is not possible without some AI breakthroughs, right? All the promises you see from Elon are just pure BS. Your tesla has issues seeing a big truck straight in front of the driver lane so you can forget the "Hey, go get me a pizza" command.
I can't really see many reasons to buy a Tesla except its propulsion technology (i.e. big batteries). I doubt that's enough to compare it with the iPhone which was really more about software than hardware. Tesla software/user experience is not significantly better than a dumb car with carplay or just an ipad fixed on board. The only way for Tesla to win more market share is for the competition to ignore/defy the wanna be EV consumers.
That's only part of it. It also includes the prestige and social cache. Once upon a time, apple was the same. Me, i don't care, but all the fancy ppl around me, the multi generational wealthy and boomers, can't get enough Teslas. That desire for luxury may wax like apple... or the coming recession may sponch it.
I'd say it's much worse. Putting all the controls including a/c on the tablet is an extremely bad idea.
This is not an argument against Tesla. It's an argument cautioning against comparing Tesla to Apple. Heck, it's an argument cautioning comparing any company today or in the history of companies to Apple.
The most expensive iPhone kept getting more expensive but for almost it's entire history there has been a <$450 iPhone despite inflation and the overall rising average purchase price of a smartphone.
Apple doesn't compete in the ultra-budget space but pretty much from the get-go Apple has been competing on price and value with older models, the 5c, the SE line, the XR, etc.
For reference, iPhone 1 released at $715 2022 dollars compared to the $400 SE available now.
https://www.gsmarena.com/charts_show_the_evolution_of_iphone...
They have huge amounts of debt because they run huge financing departments and therefore also have a huge number of assets on the balance sheet.
>Their gross margin on cars is the highest in the industry.
They have a completely different sales model, so it's apples to oranges. Most OEMs wholesale cars to dealers, of course those margins will be smaller.
>Tesla has been hitting their goal of growing at 50% per year for a decade and plans to continue until they are making 20 million cars a year in 2030.
Base rate fallacy, extrapolated into infinity, sure.
>The next 5 years are critical for the existing players and many will shrink dramatically or go bankrupt.
Some will disappear or merge, of course. But the next 5 years is also crucial for Tesla, since they are still a rounding error in global market share.
Well yes, but they've been successful with this sales model, and sell cars all the same, so that makes them more valuable in comparison.
There's also a lot of super weird dealer kickbacks behind the scenes that can make gross margin misleading for traditional autos, probably in Tesla's favor.
> They have a completely different sales model, so it's apples to oranges. Most OEMs wholesale cars to dealers, of course those margins will be smaller.
This is the crux of the innovator dilemma - that their dealer sales model was a moat to prevent new entrants, and it could be their lodestone as well, preventing them from actually being able to compete with Tesla (since shifting from that will likely prove to be difficult/impossible).
Doesn't hurt Tesla that dealers are notoriously unpopular with customers.
You only need to extrapolate Tesla's existing revenue and growth out for five years to make them the biggest automaker in history, though.
Clearly, yes, it's going to stop somewhere. But a first principles argument like yours is running out of room. It made sense a few years back when they were still popular-but-tiny. At this point, the median expectation pretty much has to be that Tesla will be the dominant vehicle manufacturer globally for the next decade or three.
You know that this whole game is about profits, right? If "of course" TSLA's margins are higher, "of course" their market cap will be higher.
And yes, investors are aware that this is a function of market segment. It's also a function of vertical integration, manufacturing prowess, unions, and retirees.
> debt because they run huge financing departments
Debt isn't the right metric to focus on, but the fundamental point is that if legacy auto perfectly executes a pivot, they get to keep their cash flows, while if TSLA keeps up the status quo, they expand their cash flows.
There will be a lot of stranded assets and failures to pivot in the legacy auto sector. Investors know it and the market caps got carpet bombed to reflect it. TSLA's didn't.
> Base rate fallacy, extrapolated into infinity
> Tesla, since they are still a rounding error
Do you not see the connection? Not only can we extrapolate, we can extrapolate far more precisely than usual because we already know the size and shape of the market they are expanding into. Usually these models take the form "TSLA grows 50% yoy until they top out at 1/3 of non-China auto sales" or something, and these are the models that back the current valuations. Optimistic? Sure, but not nearly as optimistic as "base rate fallacy, extrapolated to infinity." Lol.
As it currently stands the $7500 limit is only for the first 200,000 cars. Tesla benefited a lot from it and exhausted its limit back in 2018.
https://www.reuters.com/article/us-tesla-tax-credit/tesla-hi...
Is there anything in the bill that excludes Tesla from access to those credits?
Federal tax credit for EVs will remain at $7,500
Tax credit cap for automakers after they hit 200,000 EVs sold is eliminated, making GM, Tesla and Toyota once again eligible
The language in the bill indicates that the tax credit would be implemented at the point of sale instead of on taxes at the end of the fiscal year
In order to get the full credit, the EV must be assembled in North America, the majority of battery components need to come from North America, and contain a certain percentage of minerals from countries with free trade agreements with the US
Includes a new federal tax credit of $4,000 for used EVs
Includes zero-emission vans, SUVs, and trucks with MSRPs up to $80,000
Electric sedans priced up to $55,000 MSRP also qualify
The full electric vehicle tax credit will be available to individuals reporting adjusted gross incomes of $150,000 or less, or $300,000 for joint filers
> It also allows for up to a $4,000 credit on used EV's.
I can't wait for the eventual headline about how dealerships would sell cars to themselves so they could resell them and pocket an extra $4k.
I have no doubt that story will happen and come out, I'm just wondering whether it will be during or after it's common, and how widespread the abuse will be, given that even if there are provisions to prevent that, some enterprising fraudsters will find a way.
The outrage will come, but dealerships will have bled every dollar they can before anything is done. And the same people voting for the bill will come out next year campaigning against such corruption and stupidity by the government.
When you start looking at assets, it gets more interesting. Tesla's assets are ~$68B. Ford's $257B.
You can't just magically produce more cars. You need more people, more batteries, more factories and other significant capital expenditure.
My point is that "growth" is used as an excuse for Tesla's valuation but any look at comparative numbers should show you it's way out of whack compared to any auto maker. And as the F150 shows, Tesla's dominance of the EV market isn't as sticky as it would need to be to justify that valuation.
Cybertruck anyone?
In other words, the government actually saves money every time someone buys an electric vehicle.
Oil companies get massive subsidies. And Tesla's survival is dependent on green subsidies.
There's an easy (and I'd daresay, correct) solution there. Not subsidizing oil and reducing green subsidies. Unfortunately, it's not politically palatable.
The revenue Tesla gets from credit is very small compared to the revenue of cars and gets smaller and less significant with every single quarter.
I’m in the market for an electric SUV right now. The Kia EV6 and Hyundai Ioniq 5 both seem legitimately better than the Model Y, and they are substantially less expensive.
The Model Y AWD Long Range is $68,000. The Ioniq 5 SEL is $52,000. Tesla has historically never had to compete on price, but those days are ending. Either Tesla will lower their prices and their margins, or they will suffer lower sales. Competing on price is the future Tesla desperately wanted to avoid, but Tesla has not been able to scale fast enough to avoid it.
Good luck to Tesla shareholders. It’s a car company that the market is valuing as if it were a high growth tech startup.
But for now they are competing quite well against the Ioniq 5. Dealerships are now taking reservations for 2025 models of the Ioniq 5. Many people would rather pay an extra $16,000 than wait over 2 years.
I don't think Tesla is overvalued. Some (but not all) of the traditional manufacturers are undervalued. Which ones, though, that's the hard question.
Hard to take this seriously when Tesla has raised their prices multiple times over the past 18 months. Their margins aren't increasing, just their prices.
I don't think this part is true. I haven't heard of company pensions being a thing outside of US. I doubt VW, Toyota or Daimler have any pension liabilities at all, barring their US subsidiaries.
If every one of those cars has $10k of profit (way too high, but for arguments sake), that’s $650bn of profit per year.
When a single company with less than 1% share of sales has a market cap higher than the entire theoretical annual profits of an industry, that implies an insane amount of speculation (about things like Robo taxis and insurance, etc)
Is the f150 lightning not profitable for Ford? I looked just now and can't find any information (maybe have to wait until next fiscal year?). Their costs for that line are lower than most other automakers because they share so many parts and design elements with the ICE f150.
At this point, battery manufacturing is EV manufacturing. Battery costs are such a large percentage of overall costs that the entire margin of a vehicle can evaporate at the whims of a supplier.
I think we need to wait and see how SKBlueOval does before we can really judge Ford's EV performance.
Even if it grows to the point that it destroys all other automakers and become a monopoly, it's still too high. You can only sell so many cars.
The valuation seems to be taking into account that Tesla is not only about cars, but also artificial intelligence, which would allow it to expand to other markets(taxis, maybe even military).
Jury is still out.
And if they make a hundred trillion cars and sell each for 50$, they will be even richer. But both of these assumptions are absurd, so why discuss them?
There is no market for selling 20M $50k cars every year, especially of the same make.
Also, Tesla is far behind other players on self-driving, and they are losing talent, not attracting.
We can all offer our armchair theories about Tesla's actual worth, but until traders start to move en masse, that is what it is worth right now.
I think you are asking a different question: will Tesla be more profitable than the other 10 manufacturers in the long run? Because right now they are not. Personally. I don't think they will ever scale to a commodity car as long as Elon is at the helm. I don't think he has the attention span to make a mass produced car, his ego likes doing something novel and he likes luxury. To make profit like the top 10, Tesla has to become a commoner car. I don't think he can pull off an iPhone move, Tesla may always just be a Mac.
I would argue otherwise, his movement in the recent past showing.
First off, one would have to assume he suddenly swore of luxury after seven mansions. Perhaps. He does say a lot of dumb stuff when he's stoned that he ends up trying to hide later on (e.g., submarine scandal).
Second, he doesn't seem to spend too much time in his tiny house:
https://www.msn.com/en-us/lifestyle/home-and-garden/elon-mus...
Third, where does he keep all those tuxedos he keeps showing up wearing at exclusive events for billionaires?
Fourth, he's got like 10 kids and multiple wives. And he keeps getting women pregnant. That's literally a luxury.
Maybe we have different definitions. Sure, he owns a cheap house this year that he seems to not live in, but cavorting with other billionaires and treating women like breeding stock and throwing cash at offspring so you don't have to bother raising them doesn't really strike me as living a lean life.
They don't know how many outstanding shares there are, what the market cap is relative to others, or even care about profit ratio is. They just think it's going up.
how do you know when a competitor with a high market is failing? when its market cap... er, goes down. i.e. market cap is the best measure we have of a company's future prospects. What you are seeing over and over is that the future is unpredictable.
Furthermore AMD's revenue is about a quarter of Intel's, given that AMD market share has been growing the past few years and they appear to be capable to continue growing it's not unreasonable to bet that in the next say 5 years they are going to have better returns than Intel.
Intel revenue fell 7% (YOY) in Q1 and 22% in Q2. AMD revenue grew 71% in Q1. Something tells me they aren't facing the same macroeconomic challenges.
It's creating different challenges for AMD and Intel though.
I suspect they were going to have a quarterly loss, or close to, no matter what so jammed as much future/high potential loss into that single quarter as they could as well.
Now that they appear not to have a dominant position (Samsung sells more chips! AMD is worth more!) this will blunt some opposition to the juicy handouts just passed by the US Congress and may cause some opposition to any attention the newly awake antitrust division might direct to them.
Intel isn't in a near death position like Apple was, they are rather in a more extreme version of Microsoft's directionless drift and sag in the second half of the Balmer era. And like Microsoft, Intel has a lot of resources available to use to get back to the top of the dogpile. Like Microsoft they've been squandering those resources for years, but perhaps this symbolic milestone will cause them to finally feel the tang of fear.
Otherwise they'll continue to float around on residual habits, like GE.
But as you point out I am not privy to Intel's actual practice here and haven't bothered to read the 10-Q.
But Pat mentioned in the earnings call that they expect the next quarter to be even worse and are expecting (but in reality `hoping`) that they see turnaround in the final quarter. So by this account, they need more than one quarter to jam the potential losses.
I'm not much of a PC gamer, and so I haven't built a machine from scratch or thought much about individual components in decades. But there's a small flicker of my teenage self way down in there, pumping his fist and giving a cheer.
This has been a lot of it for me.
I didn't switch to AMD until the Athlon XP 1700+ came out. I've stuck with them for desktop builds, mostly, except a few budget "Intel Gxxx" cpus, while I stuck with Intel for laptop purchases until the Ryzen 4xxx chips came out.
I've switched between Nvidia and ATI/AMD a lot over the years.
If Intel becomes the underdog (against the AMD and Apple titans), I guess I'll have to hope they put out good products :)
Time to start rooting for Intel now, lol.
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I've been rooting for Intel's AVX512 instruction set for some time, because I really think its a great technology. But with Zen3/4 on the way with rumored AVX512, and with Intel's most recent decisions to cut AVX512 from 12th gen Core-i7 processors, its hard to find an advantage for Intel right now.
Intel supports DDR5 a few months earlier than AMD, and Intel is doing some smart things with CXL and I/O space rather than CPU space. The new big.LITTLE design is interesting, but the loss of AVX512 is pretty big (and Intel really should fix that IMO).
Zen 4 is not yet formally announced (at least not the full technical details), so presumably that's what you mean.
Intel's biggest remaining advantage is if you want a laptop with Thunderbolt. It should theoretically be available on AMD laptops, but I don't know if any have become available yet.
EDIT: See below, Zen 4 is announced but not yet available, so performance and final details are pending (including models, performance, etc.)
https://www.anandtech.com/show/17399/amd-ryzen-7000-announce...
The rest of their technology was bought by AMD and used in it's MediaGX/Geode chips[3].
1 - https://en.wikipedia.org/wiki/VIA_Nano
2 - https://en.wikipedia.org/wiki/Zhaoxin
3 - https://en.wikipedia.org/wiki/Geode_(processor)#AMD_Geode
Not having to worry about 3D drivers working on a kernel update is such a nice thing.
Of course, when I started, Linux was very much the underdog, and not on billions of devices.
> Not having to worry about 3D drivers working on a kernel update is such a nice thing.
Intel does a pretty good job of kernel GPU drivers too, I thought? Their network card drivers aren't bad either. And they usually support FreeBSD as well as Linux, although sometimes Linux support comes much earlier than FreeBSD.
There's a grown-up version: build/videoediting/whatever-machine with a Threadripper ;)
Intel is still below its year-2000 peak (even in inflation-adjusted, dividend-reinvested terms).
AMD's growth since ~2015 all-time lows is incredibly impressive: https://totalrealreturns.com/s/INTC,AMD?start=2016-01-01 Ryzen was launched in late 2016 -- was that the catalyst?
Then I bought at 80 and held through 160, now it's at 96.
I'm a long term bull on AMD, but I think the rocket left the atmosphere already. To me it's a blue chip. Intel nor AMD will ever go out of business, unless and until x86 itself dies and neither can pivot. AMD has a lock on consoles, it is the only competitor to Intel in x86, it basically can't go out of business.
Not a problem - they both (Intel and AMD) make ARM chips too, don't they?
Consoles, most OEMs, and all non-gigacorps will be buying off-the-shelf processors.
That being said there's likely still a few years of runway left for their growth. Even if cloud vendors don't push their own chips aggressively, they can use it as leverage to cut into AMD margins.
I don't see how ARM is an argument. AMD will easily be able to create competitive arm processors, there just wasn't a strong financial incentive to do it before
From Nov 2012 (that was after Bulldozer), it run to $153/share on 19th Nov '21 – that's 8255,38%!
I remember vividly back in 2002 studying the newly established 'FT Deutschland' (FT's German Edition) when being in Germany, that FT Deutschland brought an profound article talking about AMD's imminent impact of success (and how it's going to hit INTC hard) with the then-new Thoroughbred-Athlons – I should've invested as I felt something was up.
For Intel the interim CFO made CEO was actually executing a strategy that might have worked. I was pretty sure Gelsinger would be a catastrophic mistake because he wasn't a fabrication guy (but maybe they couldn't hire one?) and I'm sad to see this playing out. His strategy depends on one difficult to impossible, and one impossible thing: regain the ability to move to new nodes on a very fast time scale and change the corporate culture to accommodate foundry customers without buying such a company.
By now without having heard of mass firings of incompetent managers but plenty of reports it's still a snake pit or clown show if you prefer, and the latest capex decrease of $4 billion says nothing good. Even if the latter is just that they can't buy the machines they need.
While I'm at it, how well is their 10 nm now Intel 7 node at shipping parts? That was when Intel's decades of bad top level technical management snared their crown jewel.
I'm not anti-AMD at all. I want competition in the marketplace, but their historical approach to this where they cut costs and use tricks to generate raw numbers makes it really hard to support them. "Consoles and gaming computers featuring them are selling like hotcakes!" Yeah because companies are looking to sell units at the highest profit margin.
I think the elite tier of this competition is a solid one, and I'm constantly watching to see what each company's pushing out. That being said, I think it's widely known that Intel's products in their low to mid-tier offerings are superior.
Pentium 4 and Bulldozer both had (very) long pipelines and look how they turned out. Long pipelines certainly doesn't fundamentally equal better real-world performance, short pipelines != better benchmarks. It depends on the combination of architectural decisions considered together, right?
You're going to have to expand on this concept a bit to convince people that these design decisions are a deliberate attempt to cheat the benchmarks, throwing out lingo doesn't quite suffice.
As I said, Intel's not perfect and I don't hate AMD. I want the best possible products. I just feel like market share isn't a great indicator of quality here. Threadripper and top tier AMD products are on the same level as Intel's products, but I personally tend to trust Intel's performance at the price point far more in real world situations. It was the worst kept secret in tech for years that AMD was gaming raw numbers at lower price points to sell units.
Gonna be real. This is all just my take on it, and I could be wrong or biased. I know they're not the same as they were 10 years ago and produce legitimate contenders at the top level. I just don't trust their low to mid-tier products.
Intel revenue 73.39B
AMD revenue 18.88B
TSMC revenue 58.43B
Is there an easy way to get this data over time?
Also TSMC has reportedly surpassed Intel in quarterly revenue, so all these numbers are changing quickly.
- DCAI, revenue down 16%, operating income down 90% - NEX, revenue up 11%, operating income down 60% - AXG and IFS are operating loss - Only mobile has rev and op income up
And the CEO has clearly mentioned next quarter will be even worse and then they expect things to improve; not sure about the improve part though. CFO clearly mentions restructuring charges in Q3. Add all of this up and it tells a different story.
My point is that Intel is huge company. It's going down fast, but it has still time to correct.
Market cap is a guess - whether it's justified or not will be proven by actual revenue in the future. A 3x revenue difference is a nontrivial gap, especially when AMD would have to take over the entire processor market to reach the kind of revenue Intel is currently making (or make huge strides in GPU - either way)
As Andy Grove once succinctly put it: "Only the paranoid survive"
They most likely won't be a third time lucky. They had to pivot after their first 10nm delay but their monopoly in server CPU allowed them to keep pumping money despite manufacturing delays. Meanwhile, that gave AMD a chance to catch up which they not only did but outperformed them. One can claim that it's easy to say in hindsight, but that's the hallmark of great leadership which they haven't had since Grove's retirement.
Now Intel have lost that money making division so much so that all the fanfare of regaining manufacturing leadership has been defused with the announcement of reduction of 4bn in capex and still a focus on shareholder dividend. Intel will need some financial engineering and a split of manufacturing and design shouldn't be surprising. And this won't be some smart timely pivot, but a forced split.
I think Intel lost lots of confidence from domestic users due to accusations against IME.
Not that AMD is any different but they somehow managed to not draw public attention to PSP.
AMD's just got a much brighter future.
Intel’s poor performance last quarter was mostly self-inflicted.
So not really newsworthy?