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Semiconductor companies had a tough 2022 as every aspect of the industry — from CPUs to GPUs, equipment companies and even foundries — failed to escape the downturn.
Giants like Nvidia (NVDA) and Qualcomm (QCOM) saw their stock lose 40% or more of their value, as do smaller players like Skyworks Solutions (SWKS), Qorvo (QRVO) and wolf speed (WOLF).
However, those drops seem mild compared to what happened with Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) This year.
AMD (AMD) has fallen by almost 58% this year due to, among other things, the company advance notice poor third quarter results. That weakness proves that even AMD hasn’t progressed (AMD) is done in data center and the PC market is enough to make investors favor the company’s stock.
However, some Seeking Alpha collaborators correctly predicted the decline of the semiconductor sector. Here are some of Seeking Alpha editors’ picks for the industry’s best contributors in 2022:
Not a good, very bad year for AMD
Finding an Alpha Tech Stock Pros Contributor Foresaw AMD’s Recession (AMD) last month.
On April 23, Tech Stock Pros speak “almost certain” that AMD (AMD) is about to drop in price and advises investors to sell shares. At the time, AMD (AMD) is trading at close to $90 a share, compared with current levels of about $64 a share.
Tech Stock Pros says AMD’s (AMD) growth and outperformance will decline slightly in the second half of 2022. The company predicts that the entire PC address market will “normalize” as strong growth is seen during the COVID-19 pandemic. return to normal, while GPU demand will decline as the crypto market weakens.
Both of those forecasts are exactly as they have been, as the PC market is currently predicted to shrink by around 12% by 2022 to around 305 million units. Additionally, the crypto market crashed in 2022 as Bitcoin and Ethereum, the two most popular cryptocurrencies, dropped more than 60% each.
Tech Stock Pros added that improvements in the global supply chain are likely to add more supply to the gaming console market, where AMD (AMD) have advantages.
The researchers also showed that any AMD benefits (AMD) is expected to receive from Xilinx and Pensando purchases that will help the company gain share in the data center market (another prediction), but “investors should not buy while weak.”
At the time, the researchers wrote, “We believe AMD’s stock price has yet to fully reflect its downside and that its eventual market demand will soon correct.”
As if the prospects of Tech Stock Pro prove even more pointless, the researchers even said that they wouldn’t be surprised to see AMD (AMD) stock “reached $50 for the year.” As of October 13, AMD (AMD) fell to a 52-week low of $54.37 a share.
Stocks have recovered a bit since then, but the continued sell-off in November and December has continued to affect the semiconductor industry and compound AMD (AMD).
Intel Annus Horribilis
clever (INTC) had an annus horribilis (Latin for “year of disaster”) in 2022 when the company’s stock fell more than 50%, but the disaster began before the calendar turned.
In December 2021, Intel (INTC) disclosure it will try to remove Mobileye (MBLY) in an initial public offering in 2022.
However, Looking for Alpha Stone Fox Capital Contributors guess in early January, the migration will not unlock any value.
At the time, Intel (INTC) has the value Mobileye (MBLY) at about $50 billion, but Stone Fox Capital shown that the company only generates $1.3 billion in revenue in 2021. That means the IPO will essentially value Mobileye (MBLY) with about 38 times more revenue.
Stone Fox Capital added that the IPO looks like a “desperate attempt” to raise money for (INTC) a new factory when the company turned into a foundry, producing chips for other customers.
By October, Intel (INTC) yes cut Mobileye’s valuation (MBLY) to less than $16 billion. Last unit to the community at $21 a share, giving it a market cap of $16.7 billion as the stock market recovers somewhat in October. That’s a far cry from a $50 billion valuation. original la.
Stone Fox Capital also argues that any efforts by Intel (INTC) to “unlock value” to its shareholders was negated, as all value would go to Mobileye (MBLY). That has been proven to be true.
Since the IPO, Mobileye (MBLY) has rallied nearly 21%, while the broader market is falling in that time frame.
As Intel (INTC) still retains a significant portion of Mobileye (MBLY) on their books, indicating they don’t want to lose the value they see in them, Stone Fox Capital added that Intel is led by Pat Gelsinger (INTC) will likely “need to raise some cash to fund an aggressive foundry expansion plan.”
That has also been shown to predate, as Intel (INTC) announced an approximately $30 billion joint venture with Brookfield Infrastructure Partners (BIP) (BAM MY) in August to help pay for its factory expansion plans.
What will AMD do in 2023?
While it’s anyone’s guess what will happen to the market in 2023, the curators of Search Alpha are divided on the forecast for AMD (AMD).
Contributor Envision Research suggested recently that investors who focus on the big picture will be rewarded, because “the difference between its valuation and its profits is simply too great.”
In contrast, Motek Moyen, who suggested AMD (AMD) in the past, technical indicators and fundamental data are currently not in the company’s favour.
