Tuesday, October 31st 2017

AMD Stock Plunges Due to Forecast of Slowing Cryptocurrency, Console Markets

AMD's stock on Monday took a relatively steep dive in value, following a report by Morgan Stanley that pegs cryptocurrency-fueled graphics shipments to decline by 50% next year (a $250 million decline in revenue). "We believe that AMD's graphics surge has been caused by a sharp increase in sales of graphics chips to cryptocurrency miners. We expect this to meaningfully decelerate next year," Morgan Stanley analyst Joseph Moore said. At the same time, the report expects video game console demand to decline by 5.5% in 2018, which led Moore towards lowering his price target for AMD shares to $8 from $11, a 32% decline from Friday's close.

As a consequence of the report, Morgan Stanley reduced its rating on AMD shares from equal-weight to underweight, which reduced confidence in the market, and triggered a sell-off - and following the mechanism of availability and demand, a descent in stock pricing was already painted on the wall. A 9% fall isn't something to scoff at - especially when the economics surrounding it are attributed to a single - as of yet - report. AMD stock fluctuations aren't new; the company's stock has been particularly volatile in recent times - especially when compared to its peers (and competitors) Intel and NVIDIA.
"We expect cryptocurrency to gradually fade from here, consoles to decline, and graphics to be flattish," Moore wrote. "To be clear, we admire what the company has accomplished on a fraction of its competitors' budgets in both microprocessors and graphics - our cautious view is based entirely on the current stock price, and the limited potential for upside in 2018 and beyond."

To put things in perspective, though, AMD's stock is up 64% in the past 12 months through last Friday, compared with S&P 500's 21% gain in the same time-frame. This new decline comes in the wake of AMD's last week stock plunge after the announcement of the latest Q3 results, proving that more than the fact that AMD returned to profitability after years in the red, expectation is the main driver of stock market pricing.Sources: CNBC, via Ars Technica
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45 Comments on AMD Stock Plunges Due to Forecast of Slowing Cryptocurrency, Console Markets

#1
RejZoR
Because gamers apparently don't exist anymore. Just because cryptocurrency is pissing away (thank god), that doesn't mean people will just stop buying graphic cards. Gamers were waiting for this to happen for ages.
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#2
Steevo
AMD stock is really just a play thing for traders, no one is really sure if they will continue to make good enough money to make them a good long term investment, yet, they keep bouncing back on stock pricing, someone somewhere is making money, and someone somewhere is buying up AMD stock for a good reason.
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#3
cdawall
where the hell are my stars
RejZoR said:
Because gamers apparently don't exist anymore. Just because cryptocurrency is pissing away (thank god), that doesn't mean people will just stop buying graphic cards. Gamers were waiting for this to happen for ages.
Gamers buy one to two cards every 2+ years. Miners buy 1-2 thousand cards every what year? That's a huge difference. If anything this is great you are seeing faster and faster cards pumped out.

I think you are just mad at something you don't understand
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#4
yotano211
The market for cards are kinda flooded with used cards atm. People are buying those cards instead of buying new ones.
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#5
Anymal
RejZoR said:
Because gamers apparently don't exist anymore. Just because cryptocurrency is pissing away (thank god), that doesn't mean people will just stop buying graphic cards. Gamers were waiting for this to happen for ages.
Well, used for low enough price will be for gamers, 2x impact on sales of new.
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#6
eidairaman1
The Exiled Airman
Christmas season sales will climb again...
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#7
Easo
The stock market plunges to litterally everything, including farts made by CEO.
I guess this... speculation makes someone else money...
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#8
Prince Valiant
cdawall said:
Gamers buy one to two cards every 2+ years. Miners buy 1-2 thousand cards every what year? That's a huge difference. If anything this is great you are seeing faster and faster cards pumped out.

I think you are just mad at something you don't understand
Except the cards are coming out and improving around the same pace as they've been for years now.
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#9
Lightofhonor
Made several hundred when I bought after their plunge earlier this year. Expect to do the same again :)

Gotta buy low.
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#10
yogurt_21
yay slow crypto = more normalized gpu pricing (hopefully anyway)
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#11
BarbaricSoul
yotano211 said:
The market for cards are kinda flooded with used cards atm. People are buying those cards instead of buying new ones.
Kindly point me to a reasonably priced 2nd hand GTX 1070 please.
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#13
Frick
Fishfaced Nincompoop
BarbaricSoul said:
Kindly point me to a reasonably priced 2nd hand GTX 1070 please.
Or any reasonably priced second hand GPU for that matter.
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#14
DeOdView
Those idiot thinking GPU for miner is the only business that AMD do! /sigh

GPU Division is only a part of AMD and doesn't made that much money this year either. Vega disaster rang the bell?

Stock manipulation... I smelled! /sniff /sniff

BTW, just added 3k shares :)

Cheer!
Posted on Reply
#15
yotano211
DeOdView said:
Those idiot thinking GPU for miner is the only business that AMD do! /sigh

GPU Division is only a part of AMD and doesn't made that much money this year either. Vega disaster rang the bell?

Stock manipulation... I smelled! /sniff /sniff

BTW, just added 3k shares :)

Cheer!
I sold all of my shares weeks ago but I got in right after zen was 1st announced.
Posted on Reply
#16
Frick
Fishfaced Nincompoop
I'm still sad I was super broke three years ago.
Posted on Reply
#17
Parn
Prince Valiant said:
Except the cards are coming out and improving around the same pace as they've been for years now.
Exactly. Miners haven't brought inspirations to GPU design but only greed to the manufacturers and retailers. I do hope the prediction by Morgan Stanley would be right so that we can finally get our GPUs at a more reasonable price.
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#18
Casecutter
Odd a couple of Ya-ho's weigh-in that mining with GPU will taper off, and the stock price goes blip! Although their speculation hasn't an effect on the actual pricing of AMD graphic hardware. When/if that starts to really show movement for 580 8Gb/Vega56 it appears it won't be as abrupt as the last time when Tahiti and some ways Hawaii was caught with ramped up production and then mining went "Bust". Do these "analysts" have any "real" and exhaustive comprehension of what/how AMD has been doing or asking GloFo in regards to ramping up wafer starts?

Here's my question... When this "euphoric" Stock rise finally turns (which it has that feel) will mining Ethereum be on that same downward spiral, or will it maintain/increase as a hedge against the norms of standard currency (Yuan, Euro, Dollar, Yen etc)?
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#20
HD64G
Ridiculous reaction. Ryzen, TR and Epyc are where profit is for AMD and this is going great atm indifferent to any change in cryptocurrency trend. GPUs kept AMD above the water when needed and now CPU took over as it should normally. AMD is in good path now and it is in their hand to keep it going after the Zen CPU success. Mobiles are coming and Ryzen+ also until early 2018 with Vega 11 (smaller than 10) to replace Polaris. Upgraded XB1 has more profit for AMD also as a more expensive custom design for a more expensive console. Profit matters and it will get only better from now on. Not valid suggestions financially at all from the "analysts" imho.
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#21
cdawall
where the hell are my stars
Prince Valiant said:
Except the cards are coming out and improving around the same pace as they've been for years now.
I would argue pascal was a pretty big thing. GP100 being a prime example didn't even make it to the consumer market.
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#22
phanbuey
Steevo said:
AMD stock is really just a play thing for traders, no one is really sure if they will continue to make good enough money to make them a good long term investment, yet, they keep bouncing back on stock pricing, someone somewhere is making money, and someone somewhere is buying up AMD stock for a good reason.
^ this.

They might fall back into the mid 9's then some excitement around mobile/zen 2 / navi will come out and they will peak back up to 16 then crater again.

I held on too long thinking there would be a pop after earnings LOL...
Posted on Reply
#23
R-T-B
RejZoR said:
Just because cryptocurrency is pissing away (thank god),
yogurt_21 said:
yay slow crypto = more normalized gpu pricing (hopefully anyway)
uh, wut.

Posted on Reply
#24
efikkan
Everyone knows cryptomining eventually becomes unprofitable, as the difficulty rises and competition for mining increases, it just becomes a question of timing before the increase in value can't keep up. This is why we have seen many cryptomining bubbles in the past, and will continue to see more in the years to come. It's important to know that GPU sales related to chryptomining are still marginal.
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#25
StrayKAT
I'll believe the end of the console market when I actually see it. This thing has been said before, but it doesn't seem to die.

But we are definitely closer to PC/Console convergence than we ever were. So ultimately it's not gonna be bad for the GPU market. It just means PC gaming become king (yay!).. it's not like anyone will stop buying games in general.
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