Im currently using Throw Away Email, and wow, they are nasty pushy. And yes, I'm polluting their Database. Too bad, so sad :)

Theyre digging in "what kind of brokerage work do you do" and then asking very pointed money-market questions.

When you get to "Suggestions" they aren't suggestions; they force you to enter multiple stocks.

So fuck them. Here's a Copy/Paste.

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Summary

In my previous article I showed how speculation going into Zen's launch greatly exceeded speculation going into the Athlon and Opteron launches.

In this article, I take the comparisons further.

I compare both the revenues expected/attained by AMD and the market caps into the 3 launches.

The Investors of today like AMD nearly 4x better than when Opteron (or Athlon, for that matter) was looking pretty.

My thesis on Advanced Micro Devices (NYSE:AMD) is as follows:

    I am negative on AMD because it is my belief, based on leaked benchmarks, that the company's incoming Zen-based CPUs will still underperform Intel's offerings materially, when it comes to single-threaded performance. I believe AMD will compensate for this the same way it has, historically: by selling CPUs with a higher core count. This puts AMD at an intrinsic margin disadvantage, which is made worse by the fact that AMD is fabless whereas Intel (NASDAQ:INTC) runs its own factories (so AMD loses the foundry margin as well).
    I also think AMD got way ahead of itself. In my last article, titled "Advanced Micro Devices: Then And Now", I explained this by showing AMD's behavior versus how it behaved during 2 extraordinary past events: the launch of the original Athlon and original Opteron. In both those instances AMD stepped ahead of Intel while with Zen AMD is only expected to get close to Intel. Still, in both of those instances AMD had nothing like the present run going into those launches.
    While I am negative on AMD, I am not negative enough to sell it short. I don't think the timing is right for such a move. I also think that there's the chance Zen gets "close enough" even if it underperforms, allowing for substantial share gains while selling at a discount. Thus, before considering selling short AMD, I'm waiting to see how Zen actually performs.

With that being put out of the way, I'm writing this article because I think the prior one didn't quite filter through. From the comments, one would guess that the message "AMD is much more speculative going into Zen than going into Athlon or Opteron" didn't register. The criticism was far and wide, including such things as:

    This time is different because the market is larger.
    This time AMD is different because it also has GPUs and custom silicon and whatnot.
    That's only share price (it was an adjusted share price …), not market capitalization.
    AMD was thought to go bankrupt this time, and back in 1999 or 2003 that wasn't the case.
    Etc, etc.

Well, I feel I need to give some more detail here. This detail will show that sentiment today is even more extraordinary than what the previous charts showed. So here we go.

Revenues, Now And Then

Over the last 12 months, AMD has produced $4.24 billion in revenues. For 2017, including the early Zen launch, expectations are for $4.55 billion in revenues. Now, remember:

    This includes Zen.
    This includes GPUs.
    This includes custom solutions (consoles, etc).

Why is this revenue number relevant? Consider the following regarding the past two episodes I mentioned:

    Athlon. In 2000, AMD had revenues of $4.64 billion.
    Opteron. In 2004, AMD had revenues of $5.0 billion.

In short, AMD's revenues were larger in both those years, versus those expected for 2017 including Zen. This includes Zen, GPUs and everything else, thus rendering the arguments that AMD is "much more" today completely moot.

Market Capitalization, Now And Then

In my previous article I compared just the relative share prices going into product launches. Of course, AMD has had many losses and M&A (acquiring ATI) throughout the years. This naturally led to a much higher share count today, versus what it was back in 1999/2003. How much higher?

    As of the last 10-Q, AMD reported a diluted share count of 815 million shares. Potentially, the actual diluted count is over 1 billion shares (diluted shares for the quarter don't include all potential dilution because AMD reported a loss).
    As of 1999 year-end, AMD had a diluted share count of 294.6 million shares.
    As of 2003 year-end, AMD had a diluted share count of 346.9 million shares.

Now consider the following:

    After the current run, AMD sits at $10.75. This gives it a market capitalization of around $10.75 billion.
    When AMD released the Athlon, the stock stood at $9.58. This gave it a market capitalization of around $2.82 billion.
    When AMD released the Opteron, the stock stood at $8.47. This gave it a market capitalization of around $2.94 billion.

It's easy to see that AMD's market cap today is wildly higher than what it was back then (1999, 2003). That is, while the share price isn't much different, due to the share count AMD today is valued at a significant multiple of AMD right before either the Athlon or Opteron were launched.

Conclusion

From this exercise we see that:

    AMD today is expected to have lower revenues when it starts selling Zen, versus the revenues it reached when it was selling the Athlon and Opteron. Perhaps estimates will be revised higher. Perhaps even much higher. But the present estimates are factually lower than what was attained back then.
    Yet, at the same time, AMD goes for a market capitalization that's 3.6-3.8x higher than it was back then, going into the Zen launch.

Thus, it isn't hard to conclude that the AMD of today is massively more speculative than the AMD of either 1999 or 2003. All the arguments that it has more products now are also rather irrelevant when we consider that today's AMD is still expected to be smaller than the AMD which resulted from those past (successful) launches. Never mind that we're comparing numbers after a verified success (1999, 2003), to an uncertain success (2017).

Finally, yes, AMD is more diversified today. However, AMD isn't potentially more profitable because back in 1999/2003 it controlled its own foundry and now it doesn't. Instead, right now AMD has contracts which try to assure the foundry's economic returns, while punishing AMD's.

All of this being factual, what we can easily say is that today AMD's stock discounts improvements wildly in excess of the analysts' expectations. If those improvements don't materialize -- well in excess of expectations -- the stock will have very significant downside.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.