This was nothing out of the ordinary. The AMD report turned out to be extremely negative and I'm 100% sure that in the coming years the situation will be just as bad. In my previous idea for NVIDIA, I thought that the price of $50 would be more or less optimal for AMD. Now I'm more inclined to believe that in 2023-2024 the price will slowly fall to the levels of 2015-2016. So if you still have AMD stock - sell it. And If u want to buy it - just don't. The only profitable idea at the moment is to short the entire semiconductor sector (NVIDIA, AMD, Applied Materials - these 3 stocks will drop at least another 40% within a year). Judging by the reports, this will probably be one of the weakest sectors for the next 2-3 years, which means the most profitable for the short.
Youre insane to think AMD is going to be traded as a penny stock - sure youre bearish but to conceive $5 for a semiconductor that is one of a leading titan in the industry to $5 without any quantitative reasoning is foolish.
Heist_FlyZ
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@smosh3630, I just proceed from the fact that there will simply be no reason for any semiconductor stock to rise. And considering how the market reacts to bad reports + potential market drop in 2023, I think we can talk about a price of $5-10. Not this year, of course, but in 2023-2024 it's quite possible. Also, AMD has been trading like a penny stock for over five years, and given the current economic climate, I see no reason why we can't go back there.
qg454psgj6
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@Heist_FlyZ I agree with @smosh3630 … although my opinion doesn’t mean jack… but, even if the fundamentals were to further deteriorate, AMD just would not go down to penny stock levels. Question for you guys though - why is everyone SO bearish on semiconductors? I’ve not followed the news on it closely but the takeaway for me has been there aren’t enough chips being produced… which tells me demand for this is high (and increasing)… is it that ppl are bearish on semis for the *near term* (since less chips = less revenues) but bullish longer term? Or is there a big chunk of the narrative around semis I’m missing? Thanks in advance!
mulletmate
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@qg454psgj6, Fears over China-Taiwan and deteriorating macroeconomics (exchange rates are poor, volatile oil prices, inflation). The US banned exports of high-end GPUs to China. I also speculate there is a huge problem somewhere within the silicon supply chain.
arich1282
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AMD emerged from the penny stock range back in 2018 - take a look at the chart, its reasonable that it could retrace the entire move - butt puckering but still plausible. And the author is correct - if CHINA invades taiwain anytime soon its bad news bears.