AMD Stock Price Surges As It Dethrones INTC And Expands Sales With GOOG, DELL, ORCL

Since the late 90s, there has been one constant in the semiconductor world. I knew that anytime I looked at a chart of Intel (INTC), I could also pull up a chart of Advanced Micro Devices (AMD)…and it would be priced below Intel.

As the rental car ad says, I don’t know if they were trying harder, but AMD was definitely number two. If Intel was up, AMD would be up less; if Intel was down, AMD would be down more.

Not anymore.

In what seemed to investors like the blink of an eye, the two companies successfully pulled off a move Hayley Mills (from The Parent Trap) would have been proud of.

In its earnings report released the last week of July, Intel reported not only a disastrous quarter but looked to be in complete disarray as a company. All this while AMD, as summed up by CEO and president, Dr. Lisa Su when that company released its earnings the same week, is “raising our full-year revenue outlook as we enter our next phase of growth driven by the acceleration of our business in multiple markets.”

This very important inflection point between the two companies was clearly recognized in the market. Intel stock dropped as much as 22% in the days after the earnings. And AMD, which had been trading around $60 just before earnings, has risen by around 42% as I write this. The 3-month chart below perhaps explains it even more succinctly:

Intel kicked off its earnings debacle with what seemed to be an acceptable top-line number. Earnings came in at $19.73 billion, or an adjusted $1.23 per share. But after that news, which beat analyst estimates, the forward-looking guidance was nothing but negative.

The company reinstated a full-year earnings forecast, which it had suspended last quarter due to the coronavirus pandemic, and it was lower than numbers the company projected in January. Intel now is projecting $4.85 in adjusted revenue this year as opposed to the $5 it projected in at the beginning of the year.

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