XLNX as a way to invest in AMD (2023 Update)

The ship has sailed on XLNX; it has peaked and is on its way down. While you made a good profit on it, I would sell it now and buy INTC with the proceeds, definitely DON'T buy XLNX now.

So why don't you buy INTC? What's stopping you?

You don't seem to understand stocks very much. There's nothing going on to indicate XLNX is on the way down. Stocks don't move monotonically. Most of the change lately has been in sympathy with the general market. Investors are skittish about the impact of the new Coronavirus variant, Omicron. The market swings with every change in the news about it. You don't even understand what I described or you would understand you should be talking about the price of AMD.

XLNX has dropped less than AMD in the last few weeks, so the spread has closed a bit. It's now about 10%. So if you did buy XLNX stock now when the deal closes you would make 10% from it. But the reality is for a while AMD will be eating Intel's lunch, leaving them with the dirty dishes to clean up and there's nothing Intel can do about it in the short term. Intel didn't stumble with the new processing node, they fell flat on their face. Now AMD has the processing lead and Intel gets AMD crumbs.

In that case, it might be better to buy TSMC, but only if the USA expands military protections in the independent nation of Taiwan. It's time for us to recognize that Taiwan is as independent as Japan.

The entire tech sector is too expensive, even for my decades old holding on AMD. I could only afford AMD CPUs and stocks before. AMD is currently near all time high of $170B. It's cheaper than Tesla, but still expensive. AMD is 1/6 TSLA, INTC is 1/3 TSLA and TSMC is 1/2 TSLA.

I would rotate out of the tech sector and into energy. With up coming rise in electricity rate (Nat Gas from $2.5 to $5 to $4), it might pressure the tech products. Some of the gas producers are cash straped short term, due to hedging loss. But for long term, $4 NG is good for them. Many of the energy stocks are still very cheap.

You might think INTC was cheap at P/E of under 10. The trouble is they have been rather stagnant for years as they lost momentum. It will be hard for them to turn it around, especially now that they are a processing node behind. I don't see any comparison with TSLA with a P/E of over 300. I had people try to explain to me how the price is simply reflecting the future trend, but even with their highly optimistic goal of 50% growth per year, it would take 7 years to reach parity if treated as a normal auto company which is what they are ultimately. But there is a aura surrounding Tesla which is not justified. Any investment in TSLA is an investment in that aura. I wonder how little it will take to tarnish that aura and bring the stock way down. There was a report of a government investigation regarding the safety of allowing games to be played on the console while the car is in motion. I dunno about that, but you don't have to worry about anyone using the browser since it crashes every time it is opened. Then there is the fact that Musk is selling off billions of dollars of stock. Of course, while that sounds like a lot to us, it's still only a small fraction of his holdings.

Actually, I DID buy INTC - it is a FAR BETTER investment prospect than XLNX.

Nothing to indicate XLNX will go down? Are you f****ng serious? Just look at the stock chart - yeah, you SHOULD do that from time to time. Both AMD and XLNX have got ahead of themselves and are now demonstrating the well-known phenomena called reversion to the mean.

Many stocks have small retrenchments when bad news comes in. XLNX and AMD retreated a bit on the news of the Omicron variant as did many stocks. Meanwhile you need to look at the Intel chart. In April of this year the stock was 36% higher than it is today and there's no sign of it recovering. Every time it levels off something happens that makes it drop some more. Eventually that will stop, but there's nothing in the pipeline that we can see at this point.

I'm actually ready to sell my Xilinx stock. I'm just waiting for the deal to close so I get the remaining 10% on the spread and the additional 10 or 20% it AMD will rise on that news.

Do you read any of the news on these stocks? AMD continues to eat Intel's lunch grabbing market share. What are you looking at to form your opinion? I guess you are figuring that what goes down, must come up? I only wish stocks worked that way.

AMD and XLNX are very over-valued while INTC is not. The market will figure that out sooner or later, and it looks like it will be sooner.

You can babble your nonsense all you want, but you know the day to day prices of any stock means little. But in case you are interested, AMD and XLNX were both up today while your INTC continued downward.

INTC has been dropping pretty steadily since April. There is nothing in the news that would indicate INTC is headed for a reversal of that trend. No news is not good news when it comes to stocks. INTC is not looking good at all.

As usual, you ignore the facts of a matter and spout your nonsense. Enjoy your poverty. If you bought INTC, I hope it wasn't this year. There's been no more than a handful of days when it was priced lower than it is now.

AMD is a good stock to buy on the dips. XLNX is a better way to buy it with the current 11% spread.

Oh yeah, AMD up 8% at close and INTC up only 2% following the Fed announcement of pending rate hikes. Intel couldn't even keep up with the NASDAQ. But I'm sure INTC is undervalued. The market is just being stupid about that. Maybe higher sales and profits will help. Any of that expected any time soon? Probably not with AMD eating their lunch.

Wow! Someone really needs to explain to the market what you said. Now that the market fears of Omicron are subsiding, XLNX and AMD are really rebounding day after day. Meanwhile INTC can't seem to even keep up with the Nasdaq. Every period I check over the last three years shows the Nasdaq outperforming INTC.

I suppose now that they are behind in process technology they will start rising in the market. Maybe Samsung or TSMC will be kind to them and let them share in the 3 nm node?

AMD was down over 3% today, but daily ups and downs ARE NOT what investors look at. AMD is clearly above its peer group and is ripe for a correction, also known as reversion to the mean. AMD is in the same business as INTC, so WHAT differentiates AMD from INTC to justify its VERY RICH PE?

Flyguy will never know. Most of the people who buy shares in that sort of high tech company don't either. As Daniel Kahneman points out, we have ways of thinking that work well enough - most of the time - to let us get by with relatively sketchy information.

When semiconductor manufacturing companies depend both on having access to very high resolution lithography and very clever system designs it becomes difficult to work out which one has the competitive edge at the moment, and how long they are going to hang onto it.

Exactly. That's why I referred to the week, month and every other time period up to three years! It has been a long time since INTC has even beat the Nasdaq and there's no reason to think that is going to change given the semiconductor landscape. Investors consider not where the stock is, but where it is headed.

Not many investors look only at the PE ratio. A good PE depends on many factors which I have already espoused. You seem to be either ignorant of these or simply don't understand the concept that PE is an indicator with limited context. There are many indicators, but the most important one is anticipated events. AMD is merging with Xilinx. At that point the Xilinx stock will see a 20% jump due to the price spread. Meanwhile, I've already seen a gain of 86% on Xilinx with another 20% when the merger happens.

What differentiates AMD from INTC is the forward expectation. INTC has little working for it. They are in the position AMD was in five or 10 years ago where INTC was ahead by 6 months to a year in processing technology. Intel stumbled when they blew the transition to their latest node and are now a year or more behind. They have no choice but to begin using OPF (Other People's Fabs) at a time when fabs are simply not available. So they will continue to make chips using obsolete technology. While they may not lose money on every chip they sell, they will not make as much profit because of the higher costs as well as the lower speeds. Potentially this can even turn into losses if demand for slow parts decreases.

I think I've mentioned this before, but 15 years ago, AMD was maybe 6 months behind in process technology. When they design a new generation of CPUs they produced the fastest chips on the market with an ASP to match, putting them in the black. Then Intel would catch up and AMD would bleed red ink for another year or two. I saw this cycle and told my friends to invest in AMD three different times. Only one did and tripled his investment in less than a year. When AMD fell behind by more than a year, I didn't expect them to be able to make that up, so told everyone to sell AMD. That was good advice other than for one period when AMD received a $2 billion settlement from Intel in an EU anti-competitive trade law suit. Even so, I expected AMD to die. However, selling off the fabs was actually a brilliant move enabling them to use OPFs and the latest and greatest fab tech. So I blew that one, having not bought stock at $5 that is now $150. :(

Still, I'm happy doubling my money in a year. I like the 1.7234 number.

And neither will YOU, SNIPPERMAN! People will overpay for stocks for multiple reasons (think Tesla), but, eventually, they come back down to Earth. Take Zoom, for example. AMD has absolutely NO technological edge on INTC. Neither produces the lithography: AMAT, LRCX, and KLAC do. In fact, AMD produces clones of INTC processors, not the other way around. Someone who describes themselves as smarter than everyone else, as you DO, should know this.

Not many DUMB investors pay attention to the PE ratio, is what you mean. And that is true. Ultimately, you invest in companies for the profit they produce; if they don't have any profits you are investing in their prospects to produce substantial profits in the future. Investors will give those companies a distinct time period to do that - if they don't the investors bail. This has happened to numerous companies that ran up faster than the market due to issues surrounding COVID. Zoom is a good example of that. A whole list of them can be seen in the ARKK ETF.

There are differences between AMD and INTC processors, but it isn't necessarily in AMD's favor

"Pricing is the most important consideration for almost everyone, and AMD has generally been hard to beat in the value department. The company offers a plethora of advantages, like full overclockability on most models, not to mention complimentary software that includes the innovative Precision Boost Overdrive auto-overclocking feature. The company's Ryzen 5000 series processors mark an across-the-board $50 price hike, but the faster chips earned their higher price tags. That calculus has changed now that Intel's Alder Lake chips have retaken the performance crown and have brutally competitive pricing — AMD will need to reduce its Ryzen 5000 pricing to remain competitive."

The bottom line is there just isn't any tangible factor that justifies AMD's 5X price over INTC.

And yet Intel continues to drop while AMD is still gaining.

Here's from your article.

Power Consumption - Winner: AMD. In judging AMD vs Intel CPU performance per watt, It's impossible to overstate the importance of having the densest process node paired with an efficient microarchitecture, and TSMC's 7nm and AMD's Zen 3 are the winning combinations.

Process Node - Winner: AMD (TSMC). Intel has been stuck on 14nm for desktop processors for six years.

Architecture - Winner: AMD. In judging AMD vs Intel CPU architecture, it's clear that one brand is moving faster.

CPU Security - Winner: AMD. The gap in AMD vs Intel CPU security is just too large to ignore.

Most of the other issues are not really so important to customers. Really it comes down to what CPUs are put in computers since that is how most are sold. Power consumption is very high on the list since most PCs are laptops and they often run on batteries. Lower power consumption lets the laptop makers cite longer run times.

Security is very important as well and there would appear to be a monstrous difference.

The issue with the process node is that Intel seems to have been tripped up trying to keep up with Moore's law while AMD is riding on the wave of TSMC's 7 nm process. It will be years before Intel catches up in this regard. Meanwhile AMD is gobbling up market share and Intel knows it.

You conveniently skipped the bottom line: Winner: Intel - Total And Intel didn't even have to win to be the better investment. Also, Intel owns 61% of the processor share vs AMD's 39%.

just isn't much growth prospect for AMD to justify its 5X PE ratio. And the Intel Alder Lake processors will kick AMD's butt. AMD will have to cut prices to compete with Intel, further eroding an already pricy PE ratio. If I were you I would sell AMD and use the proceeds to buy INTC.

Yes, from the reviewer's perspective. The problem is many of the items listed are not at all important to making profit on selling CPUs. That's why I didn't list them.

That's funny, it was more like 70/30 in 2018 and 80/20 before that. See the pattern??? BTW, your link is behind a paywall. Try this one.

If you insist on ignoring the facts: AMD has the process tech advantage making faster, lower power and cheaper chips, AMD has always had architecture advantages, AMD has many fewer security bugs. These issues will matter to PC makers and allow AMD to continue to grab market share from Intel. There is literally no way for Intel to overcome these AMD advantages in the short term. Maybe revisit Intel in a couple of years.

BTW, I don't own AMD, I bought Xilinx which will be bought by AMD at a 1.7234 ratio. At this point buying INTC is like leaning into a right hook. Be my guest.

AMD doesn't have to "snip away" at Intel's market share - they have to take it over wholesale. And as YOU said, owning XLNX is just a proxy for owning AMD.