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Interesting to compare Q2 2020 results between Intel & AMD: Intel Revenue: 19.7B, Net Income: 5.1B, Market Cap: 209.42B, P/E: 9.06 AMD Revenue: 1.93B, Net In

• orbifold 6y ago
  The stock price is in part determined by the discounted future Cashflow, the one of AMD is pointing upwards that of Intel seems neutral or declining. Intel had a long string of failures and bad acquisitions recently, which points to bad management. AMD has all the potential to attack Nvidia’s deep learning moat with in house talent. Maybe this is all wishful thinking though, but my AMD calls jumped 46% within a day.
  • RavlaAlvar 6y ago
    I am not seeing AMD putting any serious contenders for CUDA though.
    • xondono 6y ago
      They don’t really need to. Nvidia will have to validate and launch all of it’s PCIe4 on Epyc/Ryzen processors, so it’s not like AMD won’t benefit from the Deep Learning hype
    • zucker42 6y ago
      Isn't HIP+ROCm a serious "competitor" to CUDA? You can convert your code automatic from CUDA to HIP. At least that's why the advertising says; I haven't used it myself. Plus, PyTorch and Tensorflow have AMD support, I thought.
      • TomVDB 6y ago
        It may convert your own code, but it can’t convert the CUDA libraries. It also doesn’t help that AMD has stopped supporting ROCm for the current consumer GPUs.
        • slavik81 6y ago
          Which CUDA libraries are you referring to? NVIDIA libraries like cuBLAS? There are ROCm libraries for a subset of those, but it's definitely a work-in-progress.
    • butterisgood 6y ago
      They might not have to, as others have pointed out. Intel, on the other hand, is fighting the multi-front battle against a lot of competitors. It’s great for consumers, but Intel might have to decide to focus too.
  • nabla9 6y ago
    Wait until Nvidia buys ARM from SoftBank and steals CPU markets from both Intel & AMD in high-end high profit HPC/DL sector. https://www.bloomberg.com/news/articles/2020-07-22/softbank-s-chip-company-arm-is-said-to-attract-nvidia-interest https://www.bloomberg.com/news/articles/2020-07-22/softbank-...
    • blinkingled 6y ago
      Why do they have to wait to buy ARM to do that?
      • NameDoesntExist 6y ago
        Presumably the patent minefields of the CPU industry.
  • disgruntledphd2 6y ago
    I really don't see anyone de-throning Nvidia from the deep learning market. I'd like to see it, but I'm not sure anyone can catch up now.
    • deepGem 6y ago
      Not happening. nVidia has a stranglehold on deep learning because of CUDA and Cudnn. I don't see any AMD alternatives to take over either of these. So I wouldn't bet too much on AMD taking over the deep learning chip market.
      • popinman322 6y ago
        This. The software lead is just incredible; almost everything uses CUDA. There has been some progress, but PyTorch still isn't fully functional with ROCm yet and that feels like a good litmus test. https://github.com/pytorch/pytorch/issues/10657 https://github.com/pytorch/pytorch/issues/10657
        • ngcc_hk 6y ago
          The Apple ecosystem with its amd graphic cars and future Apple Gpu card seems to be a fight. Or at least maintain certain software not totally all cuda all the way down. And also the gaming with amd dominates both gaming platform. Really do not want just one players. And hope the high level plays have more completion. Still interest in Taiwan part. Purely from economic point of view. How secure are we ok that front, if all eggs are in one basket. Hk is fallen. Taiwan or South China Sea is in play. That will affect the supply chain.
      • CoolGuySteve 6y ago
        Who’s writing bare CUDA though? For most tasks a framework like Tensorflow or PyTorch is good enough. If AMD could provide a backend for the most popular frameworks then they could skip over the CUDA patent issue completely. The real problem is that it seems like AMD’s not investing substantially in software teams to make it happen.
  • hangonhn 6y ago
    This might be wild speculation but I just now realized that AMD, Nvidia, and, of course, TSMC are all Taiwanese lead. Did Taiwan have some kind of incubator or have some kind of special emphasis on semiconductors or is this just pure coincidence? I wouldn't be so surprised if Taiwan isn't such a small country (relative to its bigger neighbors). Just wondering.
    • kevin_thibedeau 6y ago
      They're not crippled by shortsighted management.
    • andromeduck 6y ago
      Look up Morris Chang. The man's a visionary and the single reason why Taiwan still exists as a sovereign nation.
    • kenhwang 6y ago
      The government of Taiwan realized that their semiconductor industry might be the one thing that the US would be willing to go to war with China over to protect. So the government has invested heavily in ensuring they maintain critical mass in semiconductor expertise, typically by investing heavily in university education and research in related engineering fields. Computer/electrical/materials engineering is pretty much the default major everyone gets funneled into without capacity limits since at least the 70s. For example, my parents and all their friends weren't well off enough to afford private university, but majors at public university were limited by the government based on projected need with slots offered to only the highest test scores. They couldn't test high enough to secure a public university slot for accounting, art, architecture, education, medicine, and trades such as automotive repair or plumbing. So they all ended up with computer science and engineering degrees. Fully paid for by the government. They basically treat the semiconductor industry like how the US treats its defense industry.
      • pickle-wizard 6y ago
        I have long held the opinion that education should be part of national defense. I think is a good example of what happens when you do that.
• ckastner 6y ago
  In another submitted story regarding the rumor that Intel might rely on TSMC for some of its future products, one comment indicated that [1] "Intel’s fab capacity is several times TSMC’s". I haven't fact-checked that, but given Intel's market share, it sounds plausible. Intel may be behind on process and microarchitecture, but as long as they can ship that volume, and with a far better gross margin than AMD (Intel 53%, AMD 44%), I wouldn't count them done just yet. [1] https://news.ycombinator.com/item?id=23976605 https://news.ycombinator.com/item?id=23976605
  • AnthonyMouse 6y ago
    Given that AMD is fabless these days, you would have to compare Intel's gross margin to AMD and TSMC's combined to have an oranges to oranges comparison. In that light AMD is doing pretty well. The other factor is going to be that TSMC has 5nm in risk production already. If they bring 5nm fabs online before Intel has a real answer to their 7nm process, AMD could be buying capacity from the 7nm and 5nm fabs at the same time.
  • ethbro 6y ago
    The irony is that the more of TSMC's capacity Intel contracts, the less AMD has access to.
    • selectodude 6y ago
      Between Intel, Apple and Nvidia, AMD might catch the short end of the stick there.
      • jagger27 6y ago
        AMD and TSMC have really excellent relationship. Nvidia on the other hand does not, since it's rumoured most of their next gen GPUs are going to be made on Samsung 8nm because TSMC bid high against Nvidia and wouldn't budge. Apple might be the only company with a better relationship with TSMC than AMD. Apple and AMD together should be able to keep Intel's pressure low.
    • 6y ago
• irjustin 6y ago
  Yes, but as a gross oversimplification, the P/E shows how investors really believe in AMD and the media/market sentiment is in line. Gross oversimplification because it's one ratio that can be interpreted in so so many ways. But, this is one way to look at it.
  • deleted 6y ago
    [deleted]
• mschuster91 6y ago
  > But by the sentiment of all media reports INTC is in sharp decline & AMD is killing it, yet even in their most recent results Intel revenue/earnings still dwarfs AMD's. That is because AMD only has GPUs and CPUs while Intel has a lot more side business (VDSL modem chips, Thunderbolt, FPGAs, ...). Additionally, the CPU side of Intel doesn't look very promising for the future (architectural issues like the whole sidechannel attacks, technical issues in their lithography process), they will have to invest a lot of money to get this under control - while AMD has a wildly positive outlook and is only limited by the capacity of TSMC's fabs - whatever they produce gets ripped out of their hands by customers. From a financial point of view, Intel also has the problem that AMD was drastically undercutting prices for competitive products... part of the Intel stock price was the ridiculous amount of money they could squeeze out of customers for their top-notch processors for years. AMD all but flattened that as Intel was forced to cut their prices by a bunch.
  • pjmlp 6y ago
    Some of those exploits also affect AMD CPUs.
• Nokinside 6y ago
  Intel is 10 times larger than AMD. AMD can't ramp up the manufacturing volume it has from TSMC up quickly. TSMC builds capacity to match roughly what it is contracted for. I can just assume that any extra capacity they planned sells for a very good price. Neither AMD nor TSMC can fully exploit Intel troubles because they can't foresee what happens in Intel manufacturing. Intel is selling chips like hotcakes. TL;DR Intel has high manufacturing volume and the ability to make money with less competitive product.
  • Recurecur 6y ago
    That is how Intel is hanging on... The problem for Intel is AMD is putting out a clearly better value proposition in the high-margin server space, with single socket systems beating Intel dual socket systems, and other advantages like more PCI lanes and lower power consumption. That will drive Intel prices, and margins, down. That means a lower Intel stock price as probable future earnings shrink.
• WJW 6y ago
  1. It is possible to be bigger and still be in decline, that just indicates you had an even bigger lead before. 2. Everybody loves a good "underdog takes over from the big bad empire in decline" story, both the press and the commenting public. The stories about big companies absolutely crushing their competitors in quality are just not as interesting. 3. AMD can't scale up as rapidly as a SAAS because fabs take a while to build. I'd wager Intel has (at least) five to ten years to come up with a good processor design before they get overtaken by AMD in sheer volume. 4. There are no doubt Chinese competitors with even lower sales and even higher P/E and growth rate than AMD. It'll be interesting to see how that plays out.
  • simlevesque 6y ago
    The problem with "they have 5 to 10 years to come up with something" is that they had 5 to 10 years leading and they came up empty handed.
    • feteru 6y ago
      Considering fabs take so long to build and get processes functioning well, it's likely they have another 5-10 years to blow their lead entirely. Rome didn't fall in a day
      • ryneandal 6y ago
        > _Rome_ didn't fall in a day Nice.
      • miohtama 6y ago
        On the other hand, Colosseum did not work until the version 1.1.
  • zitterbewegung 6y ago
    I agree with your points but the game has changed. It’s not AMD vs Intel It’s AMD vs INTEL vs Apple vs Amazon (and nvidia might be next.
• Recurecur 6y ago
  Right. It's all about perceived future growth. AMD has a ton of room to grow. Intel does too, but not in the processor business where it's had a near-monopoly in some spaces. Intel also has challenges in other areas, and ARM is looking strong too. It also doesn't help Intel that the long-running data leakage issues hurt it a lot more than AMD.
• jl6 6y ago
  Some believe it is better to be poor but getting richer, than to be rich but getting poorer.
• guillaumei 6y ago
  What is funny, Intel revenue growth : 20%, AMD : 26%. And Intel has NSG division that is growing much faster than AMD, almost having the same global revenue and more benefice. AMD stock is much more a meme stock than TSLA.
• nly 6y ago
  Their P/E ratio has been bouncing off a floor of ~9-10 since after the financial crisis, so there's nothing unusual about that. Prior to the FC you have to go back to 1994.
• tw04 6y ago
  So in the early/mid 2000s would you have rather owned Facebook or Myspace? You can be be a market leader and still be a failing company.
  • ac29 6y ago
    Which of the two companies who just posted record revenues and growth is "failing"?
    • tw04 6y ago
      If you think Intel isn't a building on fire you either don't work in tech or haven't spent more than 10 seconds looking at what has happened to them over the last 5 years.
      • ac29 6y ago
        In the last 5 years Intel revenue has grown from $55B to $72B. Sure AMD's TSMC-manufactured chips have a price/performance lead today, but 50 years of history show us that's only part of the story between AMD and Intel.
        • tw04 6y ago
          Missed process shrinks and had multiple major security issues. Went from having all of the major oems and cloud providers on lockdown to them universally seeking other options: whether amd, in-house arm, or both. Past revenue has never and will never be an indicator of future success.
• JoshTko 6y ago
  The easiest way to interpret this is that the market cap size is what investors expect the market share to be in about 2,3 years. That is that Intel would have about 70% share compared to something like 90% today. PE or net income is not really relevant for AMD as they are in very high growth phase (and because their gross margins are fine). The most important thing here is that Intel is failing to execute on the upcoming fab process which will unequivocally make them less competitive from 2021 - 2023 (at the very least). The uncertainty of Intel being able to execute here on out is also impacting their share price since they have had a long history of failing to execute on 10nm and now on 7nm.
  • andy_ppp 6y ago
    I think the problem with this is they will just start using TSMCs process until they become competitive again? Let's face it they have the money to pay TSMC more than AMD do I'd guess. How volume limited is TSMCs process?
    • mbajkowski 6y ago
      This is a very interesting question. With everyone fabbing at TSMC (amd, nvidia, apple, google?, amazon?, aspiring startups) I could see a bidding war for volume guarantees if there is a volume problem going forward. Some of these players have deeper pockets and margins than others.
• lbrindze 6y ago
  To me this difference in market cap and revenue you illustrate demonstrateS more that AMD has a lot of market to gain while INTC stands to lose ground. As an investor it would seem that AMD has more potential upside. Add to that they are currently producing better technology at the moment...
• Sherl 6y ago
  Dont consider P/E as sole index of company's valuation. Stock markets assign high P/E for anything they consider as "Growth". TSLA, CMG is all considered as "Growth". For some reason the present market is geared towards "Growth" than "Value".
• carlineng 6y ago
  "yet even in their most recent results Intel revenue/earnings still dwarfs AMD's." Paradoxically this is likely WHY they are getting punished so much by the market. Their current revenue/margins are too juicy to give up, despite the fact that it's causing them massive pain on the technological front.
• gameswithgo 6y ago
  >But by the sentiment of all media reports INTC is in sharp decline & AMD is killing it, yet even in their most recent results Intel revenue/earnings still dwarfs AMD's. Decline means decreasing. Which is true. But they are decreasing from a big number.
• jacquesm 6y ago
  So, do you see this as Intel being undervalued or AMD overvalued?
  • ac29 6y ago
    The issue I see is that the prices imply Intel is going to fall to 70% of the market, and AMD is going to take 90%. Obviously both things cant be true.
    • jhoechtl 6y ago
      Now project that five years into the future?
      • srcmap 6y ago
        Also, what if the cash sink in Intel's fab continue to become a drag for cash on hand and unable to produce any returns on those huge new fab process investments? 3-5 years from now, still 14nm CPU only without any volume productions on 7nm, 10nm? How much can those 14nm 300 Watts CPU can be sold for and who will buy them at that time? Actually from the past 3-5 process development history of Intel, it is not hard to see what is likely to happen.
• option 6y ago
  Intel has no leadership and their revenue is expected to go down because of that
• all_blue_chucks 6y ago
  Those P/E numbers clearly show that Intel is in decline and AMD is killing it. Why do you think otherwise?
  • deleted 6y ago
    [deleted]
• fossuser 6y ago
  [This is my take on it (largely informed by stratechery) and probably overconfident] Intel runs their own fab and for whatever reason they've messed this up repeatedly (unclear what the reason is, but it's at least partly a management/strategic failure). Their focus on old designs that are currently profitable instead of the future was a short term benefit and a long term mistake. AMD uses TSMC (Taiwan Semiconductor Manufacturing Company) to fab their chips. Apple does the same. Intel's profits from older technology and server sales have made them slow to recognize the severity of their situation. First they missed mobile, now they've had years of delays with their own manufacturing process, and now they're going to feel pressure from ARM on the desktop and probably on the server. No US based fab for modern chips is a concern for national security (particularly given Chinese interest in eventually taking over Taiwan). AMD spun off their fabs a while ago (Global Foundries) and uses TSMC for modern chip manufacturing. This gives them lower overhead now, but I'm not sure it's a much stronger position overall. There's a benefit to owning your own fab if you can pull it off. I think Intel is at serious risk long term. They need someone who recognizes the existential crises they're in and can save them. Their current results are a lagging indicator.
  • jhoechtl 6y ago
    What is Intel hindering from getting an ARM licence and outpace Apple? Is this unthinkable?
    • fossuser 6y ago
      In theory nothing (I think), in practice they've failed to execute on really important strategic moves for the last decade.
    • Recurecur 6y ago
      It is pretty much unthinkable from a pride perspective. Processor IP is Intel's bread and butter. I think if they do it it's the beginning of irrelevance, really. What might be more interesting is if Intel became champion of Risc-V...that would be like Microsoft and Linux.
• beezle 6y ago
  Also, that was a record Q2 in revenues for INTC. As much as I love AMD and that they are now competitive +/- in most cpu metrics, Intel held its own with a lot of 14++ inventory that is only now shifting to 10nm. Reality is, there is no way TSMC would be able to mfg. all of Intels cpus even if both wanted it. What I can see happening is that Intel licenses some IP from TSMC.
• mrb 6y ago
  "in their most recent results Intel revenue/earnings still dwarfs AMD's." Very simple explanation: stocks reflect future (expected) performance, not present performance. So the stock market is really just telling you they expect Intel to continue failing.
• kartayyar 6y ago
  It's important to separate a leading indicator from a trailing one.
• nine_k 6y ago
  Investors are about growth. AMD is in a better position to seriously increase the E by utilizing its P. Intel has failed to use its P to seriously increase its E for a few years, and just experienced a string of setbacks with long-term consequences. (This is why buying AMD a couple weeks ago was an obvious good move.)