Alex Cho

About the Author Alex Cho

Best tech/finance blogger on TipRanks. Alex Cho is ranked 7th among all financial bloggers, with a sector focus of technology stocks. The research he publishes captures the long-term growth potential of tech franchises, and market valuation. His research recommendations over the span of five-years has averaged into an annualized return of 19.3% across 392 ratings of which 66% were successful. Over his years of publishing, Alex Cho has been an indispensable source of information for an investment minded audience, which is why his lifetime viewership has exceeded ten million in total since 2012, across various media platforms. Furthermore, he’s frequently cited in various local business journals across the United States, and is frequently tagged with the “in-depth” designation on Google News for his public articles. The quality of his research is well known, and is well-respected which is why he’s frequently cited by other authors, journalists, bloggers and experts. Alex Cho was a former founding partner of Alexander & Cohen Capital Management, has worked as a consultant for mid-stage tech companies looking to raise capital or form an exit strategy, with the most recent consultation billed to a client that was generating revenue of $10 million+ in the web domain/registrar segment. Alex Cho is frequently invited to interview members of management at various Fortune 500 tech companies’ due to his outstanding media credentials, and credibility. Furthermore, he frequently attends various tech media events at the request of the event organizers. Alex Cho has a great relationship with Wall Street and Silicon Valley, as well. In the Venture Capital Space, he has sources that are inclusive of VC Partners, and independent research from PitchBook, Mercury Data, eMarketer, MergermarketGroup, and so forth. Anyone facing the public with investment related material needs quality sources, which should be inclusive of insights from Private Equity and various sell-side institutions and debt rating agencies as well (Standard & Poor’s, Fitch, & Moody’s). Alex Cho publishes with the support of Bank of America Merrill Lynch, Morgan Stanley Americas, Royal Bank of Canada Capital Markets, United Bank of Switzerland AG, Barclays Americas, Goldman Sachs, J.P. Morgan, Credit Suisse AG, PiperJaffray, Wedbush Securities, Oppenheimer & Co., Nomura Securities, BMO Capital Markets, Raymond James, Pacific Crest, SunTrust, Mizuho Securities, Deutsche Bank and Canaccord Genuity. Alex Cho attended ASU via the MAPP program with a 3.76 GPA in business-finance. The genius behind Cho has less to do with his academic accomplishments, but rather his ability to navigate, adapt, and improve the quality of his work through all the activities he has engaged. In the past year, Alex Cho has launched a new marketplace service referred to as Cho’s Investment Research. To learn more about this service, or to receive article notifications, be sure sure to subscribe. We provide frequent updates via our Blog Posts, which goes out to our subscribers.

A Glimpse Into AMD’s Gaming Opportunity


Chip giant Advanced Micro Devices (AMD) appears unstoppable. The stock surged nearly 70% higher since falling to its near-term low on Dec. 26.

Northland analyst Gus Richard believes AMD stock is still a ‘buy’ as he anticipates the launch of next-generation consoles in the next 12-months to drive results in FY’19 and FY’20. Also, on-going CPU shortages could last for a while longer, which should provide some near-term relief to the stock despite weakness in GPU shipments tied to cyclicality, and end-of-cycle console shipments.

AMD’s semi-custom division is expected to report declining revenue due to the aging PS4 and Xbox One, which are near the end of the current console cycle. Gus Richard mentions in his report:

MSFT’s xBox2 and Sony’s PS5 are expected to launch in CY20. AMD guided semi-custom revenue down 20% in CY19 as Xbox and PS4 are at the end of their life cycle. We believe that Sony may launch the PS5 as early as March, and this may strengthen semi-custom revenue exiting the year. Moreover, we think our estimate for semi-custom growth for CY20 will likely turn out to be conservative.

It’s worth noting that the ramp-up in console related revenue will have to wait until next year. Richard anticipates that semi-custom revenue will decline by 20% resulting in $1.58B revenue in FY’19 but will improve to $1.79B in FY’20 (representing a 13% growth rate). The launch of new consoles should be additive to AMD’s financial results next year.

Gus Richard anticipates launch of PS5 and Xbox 2:

AMD Gaming Console Refresh: Both Sony and Microsoft are expected to launch a new game console in 2020 the PS5 and the Xbox2 (code named Scarlett). Both products are expected to use AMD 7nm Ganzola processor. We believe that qualification samples are already in customer hands and believe that Sony could launch the PS5 as early as March 2020 with Microsoft expected to launch in November 2020.

The Ganzola processor is expected to be a massive performance overhaul from the original Jaguar cores, which are a couple generations old. Some technologists are anticipating a 2x performance enhancement for the CPU versus Xbox One and PS4 Jaguar cores versus Ganzola, which should help alleviate bottlenecks and lead to the launch of a true 4K gaming experience for consoles. There doesn’t seem to be enough detail relating to graphics specifications, but it’s safe to assume that AMD’s going to provide the internal parts for the upcoming console cycle, which we will learn more about at this year’s E3 gaming conference.

In terms of CPU shortage updates, UBS released a note on April 12th, 2019:

Based on Gartner’s preliminary worldwide PC shipment data, global PC shipment in Q1’19 fell 4.6% YoY. (If including Chromebook shipment, global PC shipment declined 3.5% YoY.) We attribute the decline in part to the ongoing shortage of Intel’s CPU, which has been a constraint on overall PC shipments. Based on our Asia supply chain analysis, we expect global PC shipment to gradually normalize once the CPU shortage eases, potentially, in H219. However, it may still take two to three months to replenish inventory and for channel conditions to normalize. Overall, we maintain our global PC shipment growth forecasts of -3.2%/+0.3% for 2019/20 and expect modest PC shipment improvement in H2.

AMD could absorb some of the PC shipment declines, as the company has managed to stay competitive with its line-up of CPUs, and with the anticipated launch of Ryzen 3 this year, the backdrop of weak CPU shipments/yields from Intel facilities, paired with the ramp-up of competing CPUs from AMD bodes favorably for shareholders. The loss of shipments tied to shortages could play a massive role for AMD, as even a 3% shortage that’s made up of AMD parts will drive the market share thesis that most analysts have been publishing about.

AMD has a cautiously optimistic Moderate Buy consensus rating from the Street, according to TipRanks. This breaks down into 11 ‘buy’, 9 ‘hold’ and 1 ‘sell’ ratings in the last three months. We can also see from TipRanks that the average analyst price target is $26.80 — 2.5% downside from the current share price.

 

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