Wednesday, October 24th 2018

AMD Share Price Falls ~28% via Weak GPU Sales; Revenue Share from GPUs Only 30%

Following the release of the Q3 financial results by AMD, the stock market was quick to respond to less-than-expected operating income and market share numbers with a ~9.2% drop in share price before the markets closed. This was then followed by fervent after-hours trading resulting an even bigger drop to a share price of $17.88 at the time of this post, compared to the starting value of $25.04 earlier today. The small hike and drop after-hours also indicates some enterprising parties made use of the lower share values to their profit.

AMD held a teleconference for their investors to go along with the report, and attempted to better explain what was going on. In particular, they attribute the decreased client GPU sales to a big decrease in the blockchain GPU sales market (read GPU mining) relative to the first half of 2018. The lack of competing products to take on NVIDIA Pascal-, and then Turing-based, GPU solutions also does not help. As it stands, AMD shared news that GPUs now contribute to only ~30% of their revenue with the other 70% coming from the Ryzen-based processor division instead. They hinted strongly at new products coming from both segments, including an on-track path for a 7 nm datacenter GPU later this year and new Ryzen+Vega-powered notebooks, but it appears that more needs to be done to appease their investors at this point.
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58 Comments on AMD Share Price Falls ~28% via Weak GPU Sales; Revenue Share from GPUs Only 30%

#2
Patriot
lexluthermiester said:
Typical investor panic. The price will come back up.
Yup, time to buy more stock, thanks for the discount.
Posted on Reply
#3
Fluffmeister
It's ironic, AMD are now in the position where they actually have a competitive product on the market, so the market expects bigger profits.

Posting a loss... less than expected doesn't please the shareholders anymore.
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#4
lexluthermiester
Fluffmeister said:
It's ironic, AMD are now in the position where they actually have a competative product on the market, so the market expects bigger profits.

Posting a loss... less than expected doesn't please the shareholders anymore.
Shareholders are a fickle bunch. Easily scared into a panic.
Posted on Reply
#5
Fluffmeister
Again it's not so much panic, rather expectation, you do well... they want more, expect more.

Posting loss after loss after loss keeps you under the radar.
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#6
xkm1948
Well the GPU sale drop is totally expected with the collapse of the most recent crypto mining.
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#7
silentbogo
VSG said:
AMD held a teleconference for their investors to go along with the report, and attempted to better explain what was going on. In particular, they attribute the decreased client GPU sales to a big decrease in the blockchain GPU sales market (read GPU mining) relative to the first half of 2018.
And that comes from the people who deemed revenue from crypto "insignificant" at its peak not too long ago.
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#8
timta2
Not surprising, the used market is filled with cheap old mining cards and not much new at retailers.
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#9
phanbuey
Alot of the pre-speculative stuff was priced in... most of the tech industry is priced by hype though.

Example: Micron. Massive growth every quarter and stock price drops 40% over the last few months... Dram just isn't sexy I guess. I'm pretty sure they could double their value by posting the exact same stats, but changing their name to "Not Micron" and pretending that they sell burgers.

Same thing with AMD - goes into the black, BEATS eps, misses revenue by 3% (but beats profit), has a very promising tech stack for the next 2 years, and drops over 26% total in afterhours.

Anyways, seems like a good time to buy AMD.
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#10
yakk
Talk about unlucky to release Q3 financial results the same day the stock market crash is accelerating... guess now is still better than it will be later...
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#11
Makaveli
Patriot said:
Yup, time to buy more stock, thanks for the discount.
This time to buy!
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#12
TheLostSwede
Where's the article about Nvidia's share price tanking as well? They just dropped as much as AMD, if not more, just starting at a higher price.
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#13
Prima.Vera
TheLostSwede said:
Where's the article about Nvidia's share price tanking as well? They just dropped as much as AMD, if not more, just starting at a higher price.

Yep, they are now bellow 200$
Posted on Reply
#14
medi01
VSG said:
AMD shared news that GPUs now contribute to only ~30%
And that is a problem, because...

Isn't there some VERY IMPORTANT PIECE OF INFORMATION missing in this article, let alone with this misleading sentence pulled into the TITLE? Are you guys also playing with stock!??!!?

"GPU contribute only 3 0%" information is useless, without mentioning how much it was in the past.
Last time I've checked, Semi-custom was half of AMD's business... So, what, again>
Posted on Reply
#15
lexluthermiester
TheLostSwede said:
Where's the article about Nvidia's share price tanking as well? They just dropped as much as AMD, if not more, just starting at a higher price.
That's a good point. One company's stock value dropping is one thing, but both of the world's largest GPU makers dropping the same day? What do investors think they know that we don't?
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#16
eidairaman1
The Exiled Airman
lexluthermiester said:
That's a good point. One company's stock value dropping is one thing, but both of the world largest GPU makers dropping the same day? What do investors think they know that we don't?
I agree with your point, they will rebound.

AMDs focus is regaining CPU market share in Workstation/Server markets.

GPU will gain increase with IGP sales in laptops and desktops.
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#17
kastriot
Yep lot of mining cards now available for 1/2 of msr price depending on model, so it will get just worse for AMD in gpu market.
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#18
ShurikN
With these investor calls, you either get a drop or a jump. Once AMD releases 7nm Epyc it will jump again. It's a great thing they actually managed a profit with the death of gpu mining. Just shows what a strong contender Ryzen really is.
What's interesting is not only nVidia dropped 10% in the last day (like many pointed out), but they went from ~250 to 200 in just 5 days. Which could be from a messy RTX launch or the crypto fall. Maybe even both.
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#19
TheLostSwede
Prima.Vera said:

Yep, they are now bellow 200$
The after market numbers are even worse. But this is somehow not a comparison being done in these kind of articles and I don't understand why.
If Nvidia was going up, fair enough, but they've dropped by quite a lot as well, most likely based on the crypto market news for GPUs.
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#20
Xaled
nVidia would have a much worse quarter because they earned more from crypto thing
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#21
R-T-B
lexluthermiester said:
What do investors think they know that we don't?
It's more what they missed and are just realizing now:

The crypto market died.
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#22
techy1
this is not how stock market works. first you must look at SP500 (the benchmark) and that did a -3.0% yesterday (that is HUGE) and not because of AMD. so all tech companies must and did worse than -3.0% - aapl, msft, intc (you name it) - all did a -5.0% and in days like these any news (good or bad) will only fuel more movement that has only one direction = DOWN, so amd and nvidia did double of that. but I would not rush and buy up discounted amd now, because tomorow SP500 can be +3.0% (amd, nvidia wil do at least double of that or they can stay flat - because manstream media picked up some other "important" story lines) or SP500 can be -5.0% or more and we will be talking about black thursday(?) - who knows (if you or any formum members do know - there is no reason why these "experts" are not billionaires now or near future)
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#23
Fatalfury
"AMD shared news that GPUs now contribute to only ~30% of their revenue with the other 70% coming from the Ryzen-based processor division instead "
might as well just said that we dont care about GPU market or we are quitting the GPU market.
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#24
cryohellinc
Purely speculatory. As others have stated, the value will rise back to where it was shortly as AMD has several key good upcoming products in the pipeline.
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#25
Mistral
The whole tech sector is getting decimated the last few days...
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