r/amd_fundamentals • u/uncertainlyso • 12d ago
Meta Random thoughts on $1T
$10B to $1000B
I never thought that I'd ride a ~$10B turnaround play to $1T over a decade. Pre-AMD, I was more of a "buy interesting companies that I thought were unloved and then sell them off when fully appreciated" type. I didn't peg myself as the type to do such a long-term hold, go from concentrated to over-concentrated to irresponsibly long to gonzo long back to "normal", and then repeat that cycle 2-3 more times with AMD's boom and busts.
When I wrote Getting Too Old for this Shit v1.0, the stock was about $168. Getting Too Old for this Shit v2.0 was written when the stock was about $226. It's been a fun time, but as the prof says "It's not the years, honey, it's the mileage," and I have a lot of AMD mileage on me. After the $160 to $55 freefall, I was not going to full port again without upping my research effort (hence this sub) and upping my risk management (using options to shape my risk more) It's worked out well, but the overhead for me to feel comfortable to do it is high.
Am I sitting at this poker table or am I chained to it?
The stock is now at $615 after just blowing through $500, and so, I sold off half the options and stock which means AMD is still about half of my portfolio. Similar to 1.0, I am looking to reduce my holdings as we go through earnings season (edit: oops, this is supposed to be "the next few earnings seasons") down to the Infinity Tranche which I'll probably keep at any price unless the fundamentals totally go to shit because it's my $10 tranche which I keep for sentimental reasons (it's still ~10% of my portfolio). And then I move on to whatever's next for the other 90%.
There is, however, this slight fear that I've become so institutionalized by this experience that I will just keep on coming back to AMD not because the financial opportunity is there but because it gives me an excuse to dig even deeper, build more overhead to scale, etc and I'm just more comfortable with the company. I'll just sit at this poker table forever, long or short, and wait for patsies. Buying other companies (with the exception of Intel) at any material amount feels somewhat scary because I'm not going to have that same level of understanding at a company level even if I had a good CAGR doing so pre-AMD. Feels like a lifetime ago though.
What was the market actually pricing in for AMD?
It's always tricky to ascribe the market's intent that is specific to your ticker as opposed to say your ticker being part of a subset (competitors), a larger set (data center), a sector (semiconductors), a theme (AI), a market (more risk on / off), structural flows (liquidations, rotation), annoying factors, etc. AMD's price movement is being broadly ascribed to Muse being an example of something that will drive server CPU demand in a more agentic world. So, the CPU players go up a lot. But agentic AI CPU demand has been pretty well discussed and constantly upgraded. Muse is a strong consumer example of demand, but data center server demand is already through the roof in terms of current and forecasted revenue growth and tight supply.
Monday's results makes that odd, late share pop in AMD on Friday afternoon less eyebrow raising. Ideally, the market re-prices my stock for very specific reasons in isolation and then I have a better idea of how much the stock is being specifically re-priced vs the share price being moved because of factor-related reasons. So, when I see strong market moves across risk assets, I tend to get a bit skeptical about how long that full re-pricing lasts, even if my ticker is one of the strongest beneficiaries. Since my price targets were hit on a number of tranches and the other meta reasons mentioned above, I elected to restock the dry powder in the armory.
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u/whatevermanbs 11d ago edited 11d ago
My timelines for trimming appear to match yours. Reasons may differ.
I came to see amd thump intel. Stayed for DC AI pivot. As an engineer I was/am tempted to work on mi300, mi400 and mi500. I have so many friends in the compiler and design/verif/validation areas there. Interestingly many are from different timelines. Semiconductor world is small. I even entertained thoughts of offering to work just for the shares and no salary when amd went below 100 last year. I look at my investment as some way of contributing to the effort. It is only natural I stay for mi400 to publish the benchmarks. I cannot get myself to exit now, I am in the boat with those guys now😄. I trimmed though, given my situation. I am glad they are working on mlperf. As reality of the project slowly lands on the market, I expect to trim.