[Fool] You Need AMD In 2009 - Overclock.net

SZayat · 01-02-09

http://www.fool.com/investing/genera...d-in-2009.aspx

Quote:

It wasn't a happy December for 600 AMD (NYSE: AMD) employees. Instead of a Christmas bonus, they got a pink slip and a severance package. That's 100 more than the 500 cuts the company originally expected to make.

Don't cry for the unemployed, though: AMD expects to record $34 million in cash costs related to severance payments and continued benefits this quarter. That works out to some $57,000 per lopped-off head and a pretty soft landing in hard times. And 600 out of 16,420 staffers (as of December 2007) works out to about a 3.7% workforce reduction. That's fairly drastic, but still far short of the rumored 10% cutback brewing at Microsoft (Nasdaq: MSFT) or a similar-sized plan under way at Electronic Arts (Nasdaq: ERTS).

AMD's stepped-up layoffs may be bad news for employees, but they’re a good sign for investors. This shows that management has the intestinal fortitude to make tough moves when needed, as well as the opportunistic eye to ferret out cost savings in new places.

The company probably will fall far short of its projected guidance for the current quarter, especially since the layoffs and some new goodwill and investment writedowns laid a few extra stones on that burden. But the Shanghai chips are shipping in volume through big-name server vendors like Sun Microsystems (Nasdaq: JAVA) and IBM (Nasdaq: IBM). AMD's ATI graphics cards are currently beating arch-rival NVIDIA (Nasdaq: NVDA) in a number of performance measures, and next year, we'll see the first true fruits of the ATI acquisition with new lines of highly integrated system platforms.

All of this adds up to a strong position in each of AMD's core markets. It won't kill NVIDIA or Intel (Nasdaq: INTC) by a long shot, but all AMD really needs to do is to perform once again the way it did three or four years ago. The stock price spent a lot of time in the $20 range before Intel put price-war moves on its smaller rival; after that, it even briefly touched $40 per share. Today, AMD looks poised to return to profits, and to world-beating stock market performance to boot.

Worst-case scenario? Nope, I don't see a bankruptcy or liquidation, even if the long line of creditors come looking for early payoffs. Much more likely is an acquisition at a hefty premium to today's prices, probably at the hands of Big Blue or perhaps Sun. Win or lose, I believe AMD will still beat the market next year.

mothergoose729 · 01-02-09

If I was not spending so much money on computers I would invest in AMD right now. I think AMD's new line is going to be very attractive price/performance. Especially for those looking to support AMD out of disgust of intel pricing (justified or not).

Licht · 01-02-09

I don't get how this means i need AMD this year. Yeah i'll be building systems from them and such but the name makes no sense.

Atomagenesis · 01-02-09

when are the new phenoms suppose to come out?

Villainstone · 01-02-09

Quote:

Originally Posted by Vitamin

repost
http://www.overclock.net/hardware-ne...own-ati-s.html

As for the post... With the economy the way it is right now things are just plani tough for everyone. It happens every now and again but it will bounce back as it always has. Gas goes up then down, right now it is down and everything else is up. It is designed that way so that the business elites continuously get richer.

"AMD is not so well this years boys, NP Rockefeller's are still getting richer, not to mention the Rothchild's are too."

wolf2009 · 01-02-09

Quote:

Originally Posted by Atomagenesis

when are the new phenoms suppose to come out?

CES 2009, Jan 6

ZealotKi11er · 01-02-09

AMD in my opinion has the best platform which intel will never have. Phenom + Intergated ATI GPU > Intel Quad + Intel graphics.

trueg50 · 01-02-09

Yea, I don't see how letting 600 employee's go means your doing well, it more signals that you need to cut costs.

Also, AMD cannot be bought out, and the author really doesn't ever list why we need AMD, just that "AMD will survive.. right? I hope.. I think..."

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[Fool] You Need AMD In 2009

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