AMD dropped 11% today to $4.99 a share. Thinking of getting back in (margin, investor)

[GiantRutgersfan]

I have made significant amounts of money on this stock twice in my life. 2003 or 2004, and then again in 2009.

I had been thinking about getting in again for several months now. They are the second largest CPU manufacturing company in the world. There is always going to be significant demand. They have a decent segment of the market and there is no reason to think they will not retain that.

Good chance I go through with this tomorrow. What are your thoughts on this stock?

[Majordomo]

I don't like AMD right now. I think it may go lower. Desktop and laptop sales will be pretty weak for a while. Most custom builders have either stuck with Intel or switched to Intel so AMD lost all those potential upgrades down the road. AMD's latest CPUs are way behind Intel's latest CPUs so AMD has lost its "bang for the buck" appeal. AMD GPUs are still popular but the market is small and they share it with Nvidia.

I think earnings will stay flat this year and drop next year. Revenue will probably drop for a few years. Most analysts disagree with me on revenue and earnings but we can all agree that AMD has some other serious issues that should worry investors. Return on equity is almost -50% and net margin is almost -40%. I think Bulldozer was the beginning of the end.