AMD shares fall almost 5 percent, and down by more than 12 percent in a week since it unveiled its new Epyc semiconductors. Also, get a mortgage, get free avocado toast. And Vallejo is hot for home…
Top of the Order:
The “D” Stands for Down: Barely a week ago, Advanced Micro Devices was having what was by all accounts a day of epic proportions. Actually, it was a day of “Epyc” proportions, as the chipmaker unveiled its new line of processors called Epyc. The reaction to Epyc was so strong that on June 20, the day AMD debuted the chipsets, AMD’s shares rose almost 6 percent.
Initial tests and reports said that with Epyc, AMD had something that could rival Intel in the data cente r, and give an even bigger boost to AMD’s growing presence in the market for graphics processors. It seemed like AMD was ready to get back to the big time after years of playing second fiddle to Intel, and just about everyone else in semiconductors.
Related Articles
Biz Break: Google on thin ice in Europe; LeEco’s (very) short on cash; big bucks for starter homes
Biz Break: Are Apple iGlasses next? Pandora’s CEO quits, Google gets slapped on the wrist
Biz Break: Facebook, others team up to fight terrorism; Pandora’s CEO drama
Google fights plan to slash Mountain View housing development to 1,500 units from 10,000
Biz Break: Tesla Tunes? Also, Target pulls Hampton Foods from shelves But since Epyc’s debut, AMD has seemed less like Steven Spielberg and more like legendary B-movie producer Roger Corman.
AMD shares closed last Thursday at $14.38. On Friday, the stock was down to $14.17. Monday, it closed at $14.08. And then… You get the idea.
By the time the stock market closed Thursday, AMD shares had fallen 4.6 percent on the day, to close at $12.60, shedding more than 12 percent since they ended the day of Epyc’s announcement.
What’s happened is that, despite what AMD might have going for it now, it still doesn’ t have history on its side. Goldman Sachs analyst Toshiya Hari said as much in a research report this week when he reiterated his sell rating on AMD’s stock. And whether you’ re talking about a piece of used furniture that you’ ve put up on Craigslist, or shares of a publicly traded semiconductor company, nothing quite sums up your sentiment when the best thing you can say about something is to sell it.
On the bright side, Hari said that Epyc “represents a positive step towards re-engaging the server market.” But, he also reminded everyone that servers are an “area where AMD has had minimal success in recent years, ” as evidenced by the company’s share of the server market having fallen by 24 percentage points since 2006.
As far as investors’ enthusiasm for AMD’s stock when it showed off Epyc, Hari said that he thinks hopes might be a little too high, and said the valuation outlook is “difficult to justify as the market seems to have already priced in a sharp improvement in AMD’s competitive and financial position.” As such, Hari said he thinks that AMD’s shares could fall by as much as 25 percent over the next year from his own price target of $10.60 a share.
For AMD investors, the last week had been epic, but not in a good way. Now, it’s up to the company to prove that Epyc times do indeed lay ahead.
Middle Innings:
“It’s a 2-Bed, 2-Slice Ranch Style”: Hey, who needs amenities like bathrooms and living space when you can get avocado toast, right? SoFi said Thursday that for the month of July, anyone who gets a mortgage through the mortgage broker will get a month’s-worth of free avocado toast. The promotion is in response to an Australian property baron recently saying that millennials might not be able to afford buying homes because they spend too much money on, yes, avocado toast.
Bottom of the Lineup:
And Who’s No. 1?: Maybe those taking out a SoFi mortgage can eat their avocado toast in a new home in Vallejo? If they do, they will be enjoying their snack in a home located in the nation’s hottest real estate market. A new survey by Realtor.com says the Vallejo-Fairfield market is the hottest in the country right now due to how fast homes are selling in the area and the number of views of listings on Realtor.com.
Quote of the Day: “This is the most anticipated telephone since Alexander Graham Bell’s, ” said Jupiter Research analyst Michael Gartenberg, speaking about the initial release of the iPhone, in 2007 .
Sign up for the 60-Second Business Break newsletter at www.siliconvalley.com .
