Advanced Micro Devices, Inc. (NASDAQ:AMD) Releases Disappointing Quarterly Report

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Advanced Micro Devices, Inc. (NASDAQ:AMD) released its quarterly report for 2015 and the report is not good. The company tries to spin its $1.06 billion revenue as a 13% growth over the last quarter but the company had $1.43 billion revenue in the same period last year. AMD also reported $197 million net loss this quarter; this comes on the back of $181 million net loss last quarter.

Some context is required to understand the position of AMD and make sense of the financial report. AMD is primarily known for producing graphic cards for CPU, this is used for gaming and other graphic requirements. A decade back AMD’s shares traded at over $40 per share, today they have dropped to $2.20. AMD along with NVidia is the market leader in production of graphic accessories; these are widely used in computers and consoles however graphic cards have become less relevant due to the rise of system of chip which removes the need for a discreet graphic card.

Since the company released its financial statement in October this year, the shares of the company have remained in the $2.20 range. The shares of the company have also declined with in the past one year while at the same time the shares of its chief rival NVidia have steadily climbed in the past year. This can be attributed to the better adaptation to the changed conditions in semiconductor industry due to the introduction of system of chips and not trying to take Intel head on.

On the upside Zen, the much hyped desktop chipset by Advanced Micro Devices, Inc. (NASDAQ:AMD) is expected to be available for testing in 2016. The chip has been touted as a game changer and might change the fortunes of the company however that goes both way as a dud will effectively seal the fate of the company. Some analysts expect the share prices of AMD to shoot up to $10 in 2017 but that is overly optimistic. Any chance of the company reaching even close to that kind of valuation is if it gets bought off by some other company.

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