AMD’s bitcoin-driven decline

Advanced Micro Devices: “Straight down because of bitcoin? Straight down? I don’t buy that. I think under $10 you want to pick up some AMD.”

Cramer’s lightning round: AMD’s bitcoin-driven decline doesn’t make sense from CNBC.

AMD stock prices have been correlated with Bitcoin prices for a while. The correlation is a result of AMD’s huge revenue increase from the crypto demand on GPU market. But the correlation has deteriorated over time. Amd Has actually a lot done and has planned starting this summer. The crypto world is not going to fluctuate AMD anymore. AMD stock prices have been already “discounted” by the expected volatility of the crypto-based revenue. This is why AMD stock prices did not respond to recent revenue reports and the notion of AMD’s crypto risk is excessive and mis-directed.

Cryptocurrency growth has been contributing to AMD for the last 18 months partially, As CEO Lisa Su has put it, “On the Computing and Graphic segment, …, If you look at blockchain in particular, our estimates are that it was about a third of that growth,” (Q4 2017 ER). On the other hand, it is this same correlation which led the street to downgrade AMD in light of the volatility and the potential competition ahead in crypto. Depending on whom you ask, AMD bulls and bears all have different argument. But if you get real it has a lot to do with AMD plans and new & upcoming technologies specially the ones announced in CES 2018. Summer 2018 is going to start another hardware war between Nvidia and AMD that is going to lead to a drop in GPU prices as well. AMD did very well in datacenters in 2017, also in gaming hardware and VR and showed us a bright future in ces 2018, while crypto is responsible for some of the growth it is not the main reason that AMD is where is is today comparing to 2015.

tags: AMD, Cryptocurrency , Nvidia and AMD, gpus, CEO Lisa Su,  rypto demand on GPU , nvda, stocks, shares, amd stocks, nvda stocks

Mohsen Daemi
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