$AMD is Back in the Doghouse Where it Belongs

I’ve had enough of AMD thinking they’re hot shit. The company is steaming pile of elephant shit and now the shares reflect that actuality. Shares, however, are up nearly 400% over the past two years — thanks to an overall buoyant time for the semis. God willing, on the next down cycle, shares will go all the way to $00.00.

The hype around the stock is about their Ryzen chip, which is supposed to be as good as Intel’s — but cheaper. The company came in with weaker than expected guidance and margins. Taking into consideration that the valuation is absurd, at 38x EBITDA, shares are overdue a sound thrashing.

UBS reiterates a sell, citing AMD as being a piece of shit that should be burned.

UBS notes AMD reported an inline quarter but its margin guidance was a little lower than we expected. They keep a Sell rating on the stock as we see limited EPS growth near term to support its high multiple as it needs to invest heavily to keep pace with Intel and NVIDIA. They believe AMD has shown a good ramp of sales of its Ryzen PC chip in 1Q17 but we will likely need to wait to see how 2H17 sales trend and what the competitive response will be from Intel in PCs. AMD also reported that its Vega graphics chip is having a successful launch. They look to see if it can gain more graphic chip market share in 2H17 from NVIDIA before they reconsider their investment rating; Sell.

Overall, this is weighing on chip stocks, off around 1-2% for the session.

Interestingly, the main ETF in the space, SMH, is now flagged OVERSOLD in Exodus. The track record for this signal is flawless.