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AMD passes Intel in market cap

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Re: AMD passes Intel in market cap

#81

Post by namecheapTA »

sbf501 wrote: post #74
elromulous wrote: post #18

So I'm very much in camp AMD. But, market cap has proven over and over again to be kind of bogus. E.g. do we really think Tesla is actually worth more than the rest of the top 10 or so automakers?

This is implicit when understanding market cap. Market cap means yes, a certain number of people willing to buy Tesla believe it is worth the combined cap of the next 10 auto makers. It doesn't matter if that is right or wrong, all that matters is that stock traders believe it. If they didn't, the stock wouldn't be that price. That is literally how the stock market / market cap works: if someone will buy it at that p…

I know several people that bought Tesla stock in the last 3 years, and I know for sure that none of them think about it in terms of being worth more than most of the other companies or combined. They bought the stock because they like the cars, see the cars often, and most importantly, they think the stock will rise and make them money.

They don't know how many outstanding shares there are, what the market cap is relative to others, or even care about profit ratio is. They just think it's going up.

Re: AMD passes Intel in market cap

#82

Post by anony999 »

mg wrote: post #69
Aloha wrote: post #56

Earlier quoted context omitted.

I dont think they can continue to grow at that rate and preserve their gross margin. The high end part of the market isnt large enough to sustain 20m cars a year. To give you an idea, for scale, the two largest producers made 10m each in 2019 roughly respectively - and those two are VW and Toyota. I cannot see in any way for Tesla to displace that many units and maintain their margins at the level they have them. The…

I heard the same arguments when Apple had a hit with the iPhone. The high end of the market is saturated, and soon the competition would bring down the prices. But the price of the iPhone continued to go up. It never stopped going up. Because it continued to offer more and more value. People already see some value in Teslas self-driving technology. And that value will continue to go up for a long time.

>> People already see some value in Teslas self-driving technology. And that value will continue to go up for a long time. Up to the point where you tell your car "Hey, go get me a pizza".

You are aware that real self driving(L5) is not possible without some AI breakthroughs, right? All the promises you see from Elon are just pure BS. Your tesla has issues seeing a big truck straight in front of the driver lane so you can forget the "Hey, go get me a pizza" command.

I can't really see many reasons to buy a Tesla except its propulsion technology (i.e. big batteries). I doubt that's enough to compare it with the iPhone which was really more about software than hardware. Tesla software/user experience is not significantly better than a dumb car with carplay or just an ipad fixed on board. The only way for Tesla to win more market share is for the competition to ignore/defy the wanna be EV consumers.

Re: AMD passes Intel in market cap

#84

Post by jongjong »

I had invested in AMD when Lisa Su took over as CEO. I had been keeping tabs on the company for some time. Unfortunately I needed money to cover my basic living expenses and had to sell all my shares about a year later. Even at the time, it was painful because I had spent a lot of time researching AMD and I was very optimistic about Lisa Su based on her background and her tenacity.

I could have made maybe 20x on my investment... Still, I don't feel regret. You can only regret things if you had a choice and I know that there's no way I could have avoided selling those shares.

Re: AMD passes Intel in market cap

#85

Post by tsimionescu »

tiahura wrote: post #57
ido wrote: post #29

Earlier quoted context omitted.

The less literal reading of OPs statements is that Tesla is overvalued & will at some point in the future face correction down to a value more in line with their sales/profit potential. I have no horse in the game (no Tesla nor any other automotive stocks) but we’ve definitely seen companies being massively overvalued in the past and then face fierce correction - AOL was once worth $222 billion and later (not even th…

We’ve been hearing that for at least 4 years at this point. Along with scenarios where Volkswagen or Ford is going to teach Tesla how things really work. I’m not persuaded. First, my understanding is that Tesla has a night and day lead in battery sourcing. Second, Tesla doesn’t have the legacy costs that the others do. Also, at this point, Tesla is still selling cars faster than they can build them. Even if demand we…

Sure, but Tesla is selling high end cars, which are a rounding error in the car market.

Re: AMD passes Intel in market cap

#86

Post by Kranar »

axlee wrote: post #75
njarboe wrote: post #51

Earlier quoted context omitted.

The top ten automakers have huge amounts of debt and pension liabilities. Tesla has neither. None of them are making profitable EVs at scale. Tesla has been hitting their goal of growing at 50% per year for a decade and plans to continue until they are making 20 million cars a year in 2030. Their gross margin on cars is the highest in the industry. The next 5 years are critical for the existing players and many will…

Tesla's only claim to profitability is government-enforced carbon compensation laws. Tesla is basically a greenwashing insurance that masquerades as a real automaker, don't get fooled.

It's cheaper to to provide that government-enforced carbon compensation than it is to provide the massive amounts of subsidies and tax credits that oil companies get.

In other words, the government actually saves money every time someone buys an electric vehicle.

Re: AMD passes Intel in market cap

#87

Post by pietroq »

fuzzieozzie wrote: post #19
api wrote: post #4

One of the most destructive things you can do to a company is give them a near market monopoly for a while.

I hate to say it, but a leader who lives in fear of this is what Intel needed to stay ahead. Andy Grove believed and lived in fear of monopoly power ... since then CEOs at Intel have lacked that conviction.

"Only the paranoid survives" - Andy Grove

Re: AMD passes Intel in market cap

#88

Post by myownpetard »

ClumsyPilot wrote: post #47
mimikatz wrote: post #21

Earlier quoted context omitted.

Yes we do, that's literally what a marketcap is. People who are sure it isn't correct can beat against it and profit in the correction.

> People who are sure it isn't correct can beat against it and profit in the correction. the market can stay crazy lobger than you can stay solvent. You losses in shorting are unlimited. Every i vestor from Warren Buffet to my dog strongly advises against shorting

> You losses in shorting are unlimited.

Buy puts.

> Every i vestor from Warren Buffet to my dog strongly advises against shorting

If you are not sophisticated enough to take a short position, you are probably not sophisticated enough to buy a specific equity. This is true of essentially everyone who does not invest professionally, including myself.

Re: AMD passes Intel in market cap

#89

Post by beckingz »

jmyeet wrote: post #70
njarboe wrote: post #51

Earlier quoted context omitted.

The top ten automakers have huge amounts of debt and pension liabilities. Tesla has neither. None of them are making profitable EVs at scale. Tesla has been hitting their goal of growing at 50% per year for a decade and plans to continue until they are making 20 million cars a year in 2030. Their gross margin on cars is the highest in the industry. The next 5 years are critical for the existing players and many will…

Tesla's valuation is roughly $800,000 per car they shipped last year. Compare this to Ford, which is roughly $30,000. Quick googling shows Ford has $138B on total debt, a market cap of $60B and produced almost 2M cars. Tesla still has $30B in debt. When you start looking at assets, it gets more interesting. Tesla's assets are ~$68B. Ford's $257B. You can't just magically produce more cars. You need more people, more…

That's a huge amount of working capital at Ford! Wow.

Re: AMD passes Intel in market cap

#90

Post by wavefunction22 »

300bps wrote: post #66
wavefunction22 wrote: post #49

Earlier quoted context omitted.

I think market cap is a bit misleading. Enterprise value (market cap + net debt) is a more consistent valuation measure. The house analogy is a helpful one. Let's say I buy a million dollar house but I only have $100K of equity in it so far. My market cap is $100K and my debt is $900K. I'd argue that the house is still worth a million dollars. This is important here since Tesla has much less debt vs. the rest of the…

Market cap should take into consideration debt and all other valuation variables of a company. It’s literally what people are saying the company is worth. If you subtract debt from market cap to get the value of a company you’ll be subtracting debt twice. Your house analogy and the way you explained it does not make sense to me. Since market cap is what the market is saying a company is worth, it isn’t right to equat…

Market cap isn't saying what the 'company' is worth. It's a measure of the equity portion of the ownership of the company. It excludes the debt portion of the ownership.

Right now GM has an enterprise value of $130B. That means it's expected to spit out $130B of cash over its lifetime (discounted to a present day value). But the market cap is only $50B. Meaning $80B of that future cash will go to GM's lenders.

It of course feels super counter-intuitive to add debt (which feels like it should be a negative) to the valuation. But I always felt the house analogy gives an intuitive everyday example.

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