AMD’s Crypto Hangover: Challenges Ahead as Q4 2018 Report Looms

The Crypto Dilemma

As the cryptocurrency market experiences turbulence, companies like Advanced Micro Devices (AMD) find themselves navigating a tricky landscape. With the impending release of their Q4 2018 report, analysts are alert to the potential ‘crypto hangover’ that may impact AMD’s performance. It’s not just the coins that are unstable; the GPU market has been on a wild ride, contrasting sharply with the peaks of early 2018.

Market Trends in Graphics Processing Units

In a recent report from MarketWatch, Susquehanna financial analyst Christopher Rolland highlighted AMD’s proactive approach to managing expectations. However, the grim reality of plummeting retail prices for graphics cards looms large. Take, for example, the Radeon RX580 GPU – once a hot commodity among miners, its price has dropped a staggering 67% from an average price of $550 to a mere $180. The rise and fall of cryptocurrencies have turned once-thriving businesses into a collectors’ item sale gone wrong.

The Analyst Outlook

Analysts are predicting a bumpy ride for AMD heading into 2019. Cowen analyst Matthew Ramsay noted some lingering inventory challenges that might hurt AMD’s foothold. After a Q3 that felt like trying to sell ice to penguins, Ramsay forecasts Q1 2019 to potentially fall below consensus expectations. In the world of stock, those might be more like consensus ‘whoops,’ indicating that AMD’s GPU sales might need some serious rebranding – or at least a terrific return policy.

CEO Insights on Sales Performance

AMD CEO Lisa Su has stated that while sales for client and server processors took off, GPU sales were considerably weaker in the last quarter. She hinted at a slow but steady recovery, suggesting it may take a couple of quarters before channel sales normalize. It sounds like AMD might have to channel their inner Zen and practice patience, or at least have a strategy meeting over coffee and donuts.

Nvidia Faces the Same Music

It’s worth noting that AMD isn’t alone in this struggle. Taiwan-based Nvidia suffered as well, coinciding with the downturn in crypto mining profitability, which caused a dramatic drop in crypto-related sales. In Q4 2018, Nvidia’s shares plummeted by 54%, making a stunning appearance as the worst performer in the S&P 500. If that doesn’t scream market volatility, nothing does! Analysts are left to wonder if they should be investing in GPUs or just some good old-fashioned salt for future wounds.