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Of all the Cinderella tech stories we’ve seen since the turn of the century, none can hold a candle to the story recently created by famed microchip maker Advanced Micro Devices, Inc.
AMD has seen its stock grow over 4,000% in the past five years. This is something that Facebook, Apple, Microsoft, Netflix, Google or even Tesla can’t boast of right now.
In terms of earnings, the third quarter was strong. Overall, the company achieved revenues of $ 2.8 billion in the past three months, a record for the company by far and nearly $ 1 billion more than the average quarter.
It seems that unlike SAP, which we talked about yesterday, the pandemic is working favorably for many. However, the shares are falling.
Sure, some of this may be because the entire market is down. The Nasdaq is recording a 3% decline at the time of writing (noon on Wall Street).
So the tech sector is also taking a hit as this large sell-off continues. Also, it should be pretty easy to say that some investors may be almost ready to take their profits after holding for so long.
Most experts, however, seem to attribute the fall to completely different news. …
The move is certainly risky, especially for a company that has worked so hard to consolidate its market share.
As explained in this CNN video, it can take five years to create a new bit of technology, and doing so requires quite a bit of foresight to understand what the landscape will look like when your product hits the market.
This future of computing, as AMD CEO Dr. Lisa Su explains, lies in data processing. We currently know that many companies rely on big data to make their decisions.
However, similar to how the brain works, modern computers simply lack the ability to process this data, and by acquiring Xilinx, it believes AMD will be well positioned to create that ability.
For investors, the big question here is about Su. Since her appointment as CEO five years ago, she has managed to take the company from the brink of bankruptcy to one of the best performing entities in the world.
So, was that breakthrough a stroke of luck or was it a project? More importantly, will this success repeat itself over the next five years?
The volatility continues
The US elections and the global pandemic were blamed for the losses, although in my mind we still needed a correction.
Across Western Europe, lockdown restrictions are expected to return to full capacity later this week.
The idea is that a cleansing November has a good chance of bringing families together for the holiday season, or at least that’s how it’s sold to citizens who are more than weary of continence and far less scared than they were in March.
According to data from the World Health Organization, cases are again on the rise, but the number of deaths attributed to COVID-19 remains consistent.
As for the election polls, it looks like Vice President Joe Biden has this on the bag. However, the race is far from over and the uncertainty about the result will only grow in the next few days.
The chance of a controversial outcome is the highest I have ever seen, and this is almost certainly a major contributing factor to the current market action.
After this, it’s the season of earnings. Second quarter earnings were less than profitable and it appears many companies are still using the pandemic as an excuse to provide opaque forecasts for their future growth, leaving investors blinded once again.
In fact, instead of asking why volatility is so high, we should ask ourselves why is it so low?
Bitcoin swallowed
Bitcoin and the gang deserve crazy props for avoiding the first two days of the sell-off entirely, but as of today it seems like the pressure was too much and they eventually caved.
What has mostly been lost so far, however, is limited to yesterday’s gains. In charting, we call it a swallowing candlestick formation, and as well as being incredibly confusing for traders (freezes in shame), it is generally seen as a bearish sign.
The only saving grace, from a technical point of view, is that we got a rebound, so we are unlikely to close below yesterday’s lows.
Either way, $ 14,000 (red dotted line) is a huge psychological barrier, and I would be happily stunned if we were able to get through it without first seeing a significant retreat.
Well, we’ll see how it turns out.
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