Business analyst Jeffries says AMD could triple it's market share admidst Intels supply problem

[Master Disaster]

Fair warning, I don't follow markets or stocks at all.

 

Business analyst Jeffries has increased its target price for AMD shares from $30 to $36, thanks in part to a report claiming more OEMs will start to ship  machines using AMD CPUs which they claim is a result of the recent Issues team blue have been suffering.

Quote

Jefferies predicts AMD shares can go higher even after the chipmaker stock's stunning rise this year.

 

The firm raised its price target for AMD shares to $36 from $30, predicting big market share gains for the chipmaker due to Intel's processor shortages. Jefferies also reiterated its buy rating for the shares.

 

Analyst Mark Lipacis cited a report from research firm Fubon, which said HP will adopt AMD processors for up to 30 percent of its consumer PCs next year and Dell will use more AMD chips for its commercial PC line.

The firm is suggesting that in the period between now and Q2 2019 AMD might see total market share increase from its current 10% to 30% as team blue struggles with manufacturing and supply issues.

Quote

As a result, the analyst predicts AMD may be able to triple its market share to 30 percent of the processor market from 10 percent today.

 

"Fubon's report that Intel will undersupply the PC market between 4Q18 and 2Q19 leaves us with higher conviction that AMD will report improving revenue, pricing and margins near term, and that is positioned to take share in the high end PC MPU and server market long term," Lipacis said Friday in a note to clients titled "INTC Supply Constraints = Multi-Fold Benefits to AMD."

 

There is "share shift potential to 70/30 from 90/10," Lipacis said. "Assuming our assessment of AMD's transistor lead in 2019 is correct, and Intel's supply constraints linger through mid-19, we think a market share of 70/30 is not out of the question."

As reported here, a JP Morgan report stated that "Intel's chip shortage is worsening" and RAM manufacturer Micron is reporting the chip shortage is affecting it's RAM sales however despite all this news AMD stock prices still fell recently.

Quote

Last week J.P. Morgan said Intel's chip shortage is 'worsening.' The firm said Intel is having capacity issues from its delays moving to next-generation 10-nanometer manufacturing technology.

 

On Thursday, Micron confirmed industry PC processor shortages are hurting demand for its memory chips.

 

AMD's stock is significantly outperforming the market this year. Its shares are up 203.3 percent year to date through Thursday versus the S&P 500's 9.6 percent gain. The company's stock is the top-performing name in the S&P 500 this year.

 

AMD shares dipped 0.5 percent Friday, however.

https://www.cnbc.com/amp/2018/09/21/jefferies-says-amd-could-triple-its-market-share-due-to-intels-supply-problem.html

 

Oh boy Intel, losing 20% market share in ~6 months is going to hurt.

 

Still it's great news for consumers, competition means better prices.

[TrigrH]

Quote

triple it's market share admidst Intels supply problem

unlikely.

[Master Disaster]

7 minutes ago, TrigrH said:

unlikely.

I wouldn't underestimate just how much share the OEM space holds. If both HP & Dell start selling Ryzen machines in equal amounts as Intel machines I could see it.

 

The large majority of users still buy from OEM not to mention the small business sector too.

 

Also it's going 10% to 30%, not 20 to 60 or 30 to 90.

[mr moose]

Intel are shifting some testing to Vietnam which might irradiate some if not a significant portion of the issues that is causing the shortage.   HP said a little while ago that they were confident supplies would be back to normal by October so I can't see this whole shortage being as being as the media are making out. 

 

EDIT: and don't forget Intel have Fab42 sitting there ready to go,  they could have decked it out months ago if they really needed the fab space.

[schwellmo92]

20 minutes ago, TrigrH said:

unlikely.

Why unlikely? Intel market capitalisation is $210b and AMD is only $30b, there's a lot of room for growth.

[PineyCreek]

...and realistically their stock is worth somewhere between 15 and 20.  They have a stronger product line now, with some awesome partner deals they didn't have before, but they still have debt, nVidia's more or less spanking them with GPU sales, and they don't have the same R&D and fab money Intel does.  EPS is still negative.  I'll buy their stock again when it drops.  AMD's a good company, but I think their stock price is fueled by hype, histrionics and insanity.  You can extend that thinking to how their business is doing overall.  I bet reality sets in, only to be tossed out the window again when they finally confirm AMD's hardware is present in the retail versions of the PS5 and new MS console.

[leadeater]

29 minutes ago, mr moose said:

Intel are shifting some testing to Vietnam which might irradiate some if not a significant portion of the issues that is causing the shortage.   HP said a little while ago that they were confident supplies would be back to normal by October so I can't see this whole shortage being as being as the media are making out. 

I think that was only in relation to the Xeon supply coming right around that time, I'm not sure if desktop and chipset supply is also tagged to right itself as well. A supply issue like this might make OEMs re-think how much the rely on one supplier anyway now that there is another supplier that can meet the performance expectations of their customers.

[mr moose]

2 minutes ago, leadeater said:

I think that was only in relation to the Xeon supply coming right around that time, I'm not sure if desktop and chipset supply is also tagged to right itself as well. A supply issue like this might make OEMs re-think how much the rely on one supplier anyway now that there is another supplier that can meet the performance expectations of their customers.

From what I've read it was top end core series and xeons, however most if the issue stem from not being able to test each die fast enough to meet demand, especially now they are making modems for the Iphones (stupid amounts of them).  If they manage to offload the testing of chips then that buys them more time. (which I get the impression is the impression they want us to get) 

[Tech Enthusiast]

When was the last time one of those "Business analysts" or "stock experts" predicted something correctly, that also did not include already available facts, for the tech industry?

 

While I would love to see AMD getting a push, I doubt Intel suddenly can't produce enough.

They did not close down any factories, so they can produce as much as before. The only way they may not be able to fulfill the demand is, if the demand skyrocketed.

 

So, losing market share due to higher than expected demand for THEIR chips? I don't really see how that is happening. That would mean the market is suddenly expanding as a whole. And that is not usually going fast enough for any company to gain any meaningful market share.

Also companies don't just buy something other than they wanted, just because they need to wait a week or two for it to ship.

[leadeater]

Just now, Tech Enthusiast said:

When was the last time one of those "Business analysts" or "stock experts" predicted something correctly, that also did not include already available facts, for the tech industry?

 

While I would love to see AMD getting a push, I doubt Intel suddenly can't produce enough.

They did not close down any factories, so they can produce as much as before. The only way they may not be able to fulfill the demand is, if the demand skyrocketed.

 

So, losing market share due to higher than expected demand for THEIR chips? I don't really see how that is happening.

Companies don't just buy something other than they wanted, just because they need to wait a week or two for it to ship.

Market analysts have to do something otherwise they would look useless and people would start to question their pointless existence .

 

*Throws random facts and wild theories up in the air*, when do I get my pay check?

[Lawliet93]

1 hour ago, PineyCreek said:

...and realistically their stock is worth somewhere between 15 and 20.  They have a stronger product line now, with some awesome partner deals they didn't have before, but they still have debt, nVidia's more or less spanking them with GPU sales, and they don't have the same R&D and fab money Intel does.  EPS is still negative.  I'll buy their stock again when it drops.  AMD's a good company, but I think their stock price is fueled by hype, histrionics and insanity.  You can extend that thinking to how their business is doing overall.  I bet reality sets in, only to be tossed out the window again when they finally confirm AMD's hardware is present in the retail versions of the PS5 and new MS console.

Amd is actually growing in the GPU market, currently they have about 36% of the market and Nvidia has lost some share. And if you take into account how many GPUs they have sold via consoles, than it's a totally different ballgame. 

[mr moose]

9 minutes ago, Tech Enthusiast said:

When was the last time one of those "Business analysts" or "stock experts" predicted something correctly, that also did not include already available facts, for the tech industry?

 

While I would love to see AMD getting a push, I doubt Intel suddenly can't produce enough.

They did not close down any factories, so they can produce as much as before. The only way they may not be able to fulfill the demand is, if the demand skyrocketed.

 

So, losing market share due to higher than expected demand for THEIR chips? I don't really see how that is happening. That would mean the market is suddenly expanding as a whole. And that is not usually going fast enough for any company to gain any meaningful market share.

Also companies don't just buy something other than they wanted, just because they need to wait a week or two for it to ship.

Demand is growing, but not in the form we conventionally view it.  They are now manufacturing modems for apple which is a large chunk of demand on their 14nm fabs they didn't have before.  They are also not producing on the 10nm fabs as they had planned which means current demand plus modems and all the new products that would otherwise have been on 10nm fabs is now having to be squeezed out of current 14nm fabs.  Also it's probably not so much the acutal fabrication of the dies that holds everything up, but all the post processing from then, as they have to cutout and complete and test every die after that (and there are a bloody lot of them as the modems are significantly smaller).

[Master Disaster]

Just now, leadeater said:

Market analysts have to do something otherwise they would look useless and people would start to question their pointless existence .

 

*Throws random facts and wild theories up in the air*, when do I get my pay check?

That sentence describes analysts in general. Michael Pachter has a 54% success rating yet whenever he opens his mouth the entire gaming press is falling over themselves to print his predictions.

[Tech Enthusiast]

2 minutes ago, Lawliet93 said:

Amd is actually growing in the GPU market, currently they have about 36% of the market and Nvidia has lost some share. And if you take into account how many GPUs they have sold via consoles, than it's a totally different ballgame. 

Pretty sure that 36 % includes the consoles.

But I don't see why this would be of any interest in a topic about CPUs tbh. Why would there be a link?

[leadeater]

6 minutes ago, Tech Enthusiast said:

Pretty sure that 36 % includes the consoles.

It doesn't, that's the Discrete Desktop GPU Market Share. It wouldn't be too difficult to pull that kind of information together though, we have sales stats of all the consoles.

 

Edit:

Though I would like to note AMD would make very little off console sales

[Tech Enthusiast]

7 minutes ago, leadeater said:

It doesn't, that's the Discrete Desktop GPU Market Share. It wouldn't be too difficult to pull that kind of information together though, we have sales stats of all the consoles.

 

Edit:

Though I would like to note AMD would make very little off console sales

When looking at Steam HW Survey it sure looks like AMD is nowhere near 36%. Hell, all AMD GPUs combined don't even match the GTX 1060 alone. Their best selling card is almost at half the share of a 1080ti, which is considered "rare". I have a hard time believing a 36% share. Where would that come from? Prebuild systems? OEMs? And we would have to expect none of those to ever log into steam?

 

 

I know the company of my wife has AMD 470s in their machines, but they will be upgrading to RTX 2080 TIs in a month. (with two DGX or DGX-2 for their server).

Still, hard to imagine where 36% would come from, if it is without consoles.

[leadeater]

3 minutes ago, Tech Enthusiast said:

Still, hard to imagine where 36% would come from, if it is without consoles.

Because Steam is a terrible indication of total market share, Steam itself is niche in perspective of total computers and over represents the higher end of the market.

[Tech Enthusiast]

2 minutes ago, leadeater said:

Because Steam is a terrible indication of total market share, Steam itself is niche in perspective of total computers and over represents the higher end of the market.

Well, fair enough.

Where would I go and look up more meaningful statistics? That 36 % has to come from somewhere. And I honestly want to know and understand these numbers.

Out of 13 tech companies I know / friends work in, only two use AMD GPUs, and both are switching by the end of this year. Not a single friend has an AMD GPU in their private system (which could be due to the high income, they all use 1080 or higher, most preordered RTX. So I understand that this is not representative).

 

Still, 36% seems crazy high, considering there is soon to be a 0% share in my personal area of reach.

With consoles factored in it would add up pretty nicely.

[mr moose]

1 minute ago, Tech Enthusiast said:

Well, fair enough.

Where would I go and look up more meaningful statistics? That 36 % has to come from somewhere. And I honestly want to know and understand these numbers.

Out of 13 tech companies I know / friends work in, only two use AMD GPUs, and both are switching by the end of this year. Not a single friend has an AMD GPU in their private system (which could be due to the high income, they all use 1080 or higher, most preordered RTX. So I understand that this is not representative).

 

Still, 36% seems crazy high, considering there is soon to be a 0% share in my personal area of reach.

With consoles factored in it would add up pretty nicely.

I have no idea where 36% comes from, JPR puts AMD at 15% and Nvidia at 18% with Intel having the rest.

https://www.jonpeddie.com/press-releases/gpu-market-increased-year-to-year-by-3.4/

 

EDIT: maybe mining has a slightly bigger effect than the actual number represent??

 

 

[leadeater]

1 minute ago, Tech Enthusiast said:

Well, fair enough.

Where would I go and look up more meaningful statistics? That 36 % has to come from somewhere. And I honestly want to know and understand these numbers.

Out of 13 tech companies I know / friends work in, only two use AMD GPUs, and both are switching by the end of this year. Not a single friend has an AMD GPU in their private system (which could be due to the high income, they all use 1080 or higher, most preordered RTX. So I understand that this is not representative).

 

Still, 36% seems crazy high, considering there is soon to be a 0% share in my personal area of reach.

With consoles factored in it would add up pretty nicely.

https://www.jonpeddie.com/press-releases/gpu-market-increased-year-to-year-by-3.4/

https://tyrone.tech/amd-gains-discrete-gpu-market-share-over-nvidia-in-q2-2018/ (JPR is the data source)

[leadeater]

3 minutes ago, mr moose said:

I have no idea where 36% comes from, JPR puts AMD at 15% and Nvidia at 18% with Intel having the rest.

https://www.jonpeddie.com/press-releases/gpu-market-increased-year-to-year-by-3.4/

Those are the non discrete, total, market share stats, a lot of the data is behind the JPR paywall so we have to rely on people with access to it. Edit: And the report only looks at PCs.

[Tech Enthusiast]

Thanks.

With these numbers in mind, AMD should be in a way better position than they seem to be in. 

 

So basically, they have that share due to low prices, but can't innovate due to low margins / missing money for RnD? Interesting. That would mean the avid AMD fanboys and their "AMD is doing it cheaper!!1!11!" - approach is really hurting AMD.

Now I wish I knew how much more margin low-end vs high-end really means. Is selling 10x 580 really better than selling 1x1080ti? 

[leadeater]

1 minute ago, Tech Enthusiast said:

Thanks.

With these numbers in mind, AMD should be in a way better position than they seem to be in. 

 

So basically, they have that share due to low prices, but can't innovate due to low margins / missing money for RnD? Interesting. That would mean the avid AMD fanboys and their "AMD is doing it cheaper!!1!11!" - approach is really hurting AMD.

Now I wish I knew how much more margin low-end vs high-end really means. Is selling 10x 580 really better than selling 1x1080ti? 

Pretty much, for every 10 RX580s AMD sells they wish they could sell just one 1080 Ti heh.

[Tech Enthusiast]

Just now, leadeater said:

Pretty much, for every 10 RX580s AMD sells they wish they could sell just one 1080 Ti heh.

Kinda makes sense.

With the 36% market share in mind, it is funny to read their yearly reports.

People keep chanting that the low price market is much more volume and much more important. But the numbers don't add up for that agenda at all.

Interesting, but also sad. I feel less and less save about trusting AMD to come back into the GPU market. Shifting my hopes more towards Intel by the day.

 

Which in turn is back to the OP!

Even if AMD can get some of those market shares in insulated areas, I doubt that AMD can make a profit out of that. It just looks like AMD is pushing for positive press more effectively, but that does not turn into better margins. Intel has enough money to spare to build a few extra factories if needed. Sure it would take 2-4 years, but can AMD use that time? Do THEY have enough factories to suddenly supply a demand that was meant for Intel? Way too many question marks in the deal for me.

[mr moose]

4 minutes ago, Tech Enthusiast said:

Thanks.

With these numbers in mind, AMD should be in a way better position than they seem to be in. 

 

So basically, they have that share due to low prices, but can't innovate due to low margins / missing money for RnD? Interesting. That would mean the avid AMD fanboys and their "AMD is doing it cheaper!!1!11!" - approach is really hurting AMD.

Now I wish I knew how much more margin low-end vs high-end really means. Is selling 10x 580 really better than selling 1x1080ti? 

I have always said AMD have been shooting themselves in the foot.  They keep developing things that they either giveaway or turn into an open source type deal trying to buy sales.  It kinda works sometimes (freesync has a good adoption rate), everyone thinks it's great that they made freesync a semi free alternative to gsync and that opengl, vulcan and mantle etc were all out there for anyone to use.  But at the end of the day if you give everything away how are you going to pay for the development of new products?  I believe there is a reason Intel and nvidia make more money than they do and it has a little more to do with running a business than a charity.