The Good About Intel Corporation (INTC), The Bad About Advanced Micro Devices, Inc. (AMD): Jim Cramer

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Intel Corporation (NASDAQ:INTC) and Advanced Micro Devices, Inc. (NYSE:AMD) are arguably some of the biggest chipmakers in the industry having reported their earnings last week. Intel reported impressive earnings shown by its growing market share and PC business growing by 6% despite being on a downward spiral over the past few years. AMD, on the other hand, according to ‘Mad Money’ host Jim Cramer on CNBC, reported hideous results, despite being in line with forecasts. Concerns continue to be raised after AMD gave estimates that were below analysts’ expectations.

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Advanced Micro Devices, Inc. (NYSE:AMD), unlike Intel Corporation (NASDAQ:INTC), continues to experience challenges with its PC business which was down by 20% on a year over basis; Intel, on the other hand, experienced a sequential improvement on this business which they compete hand in hand.

“AMD guidance for the next quarter was well below what analysts were expecting. Meanwhile, the company’s PC business was down a staggering 20% year-over-year, even worse than the previous quarter, despite the fact that Intel Corporation (NASDAQ:INTC) saw a sequential improvement in this same segment. They compete against each other,” said Cramer.

Cramer maintains that Advanced Micro Devices, Inc. (NYSE:AMD) has underperformed over the past five consecutive quarterly earnings despite the company’s CEO reiterating that the company has been consistent with its results. Analysts are also raising concerns after the company announced that it expected to report more shipments for powered consoles in the third quarter than the fourth-quarter. Analysts were expecting this business to pick in the fourth quarter.

“In fact, it now looks like the only reason Advanced Micro Devices, Inc. (NYSE:AMD) console business accelerated in the first half of the year was because its customers were building up inventory to fill the channel. Now there are only a surplus of chips in the channel and demand for the console is picking, one-quarter sooner than we thought. That’s a major blow to AMD,” said Cramer.

Cramer also took a swipe on Advanced Micro Devices, Inc. (NYSE:AMD) for claiming that its PC business stabilized in the quarter, taking into consideration it was down by 20% and that Intel Corporation (NASDAQ:INTC) continued to gain a sizable amount of market share during the period. Numbers never lie, according to Cramer, and that is why AMD management should not have defended itself after posting dismal results for the second quarter.

“The numbers don’t lie. When you report a terrible quarter and Intel Corporation (NASDAQ:INTC) delivers a terrific one, direct competitor, don’t bother to pull a bull over our eyes. All we have to do is line the numbers next to each other and let them speak to themselves, which is why, Advanced Micro Devices, Inc. (NYSE:AMD)’s stock plunged 16% in a single session, after the Quarter and the 16% actually made sense,” said Cramer.

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4 Comments

  1. It’s awesome to see a person that do not understand nothing about technology giving opinions.
    Follow and sell AMD so we can buy on the dip and make a lot of money…..

  2. AMD has been in the tech business for a very long time. They ain’t going away. Wait till they put their APU’s in tablets with windows then you will have a portable gaming/computer monster. AMD survived the fraud from INTEL when INTEL was bribing it’s companies and even Bestbuy when I was working their as a tech/sales person. Wait till the holidays and you will see their stock going up. I would def buy now.

  3. Intel has coped with memory bandwidth issues using L3 cache on chip increasing the cost. High Bandwidth Memory and new Forge processes at Global Foundries will allow AMD to produce cheaper and more powerful APUs. 1 year to a short term advantage for AMD over Intel, I’m holding my stock.

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