Kerrisdale Capital published a case study on AMD and contends the firm will file for bankruptcy by 2020. The firm acknowledges AMD may be bagging some wins, but believes a combination of an uncompetitive product portfolio, technological leap forwards by competitors, several structural challenges, ineffective strategy and a worsening balance sheet will spell doom for the chip designer.
In the investment case embedded below, Kerrisdale Capital claims time is missing for a successful transformation and notes little hope is left given AMD's worsening balance sheet. In no unclear terms, Kerrisdale calls AMD a true 0: "In our view, the
conditions we outlined support our case that AMD is a true 0 an
d we do not foresee the
company surviving beyond 2020."
While the controversial paper makes some good points, it seems to be lacking in depth as it primarily focuses on AMD's processor division. Pretty much the only discussion of AMD's graphics solutions deals with the firm's console wins, which Kerrisdale describes as "a bite from the wrong apple" due to the poor margins on these semi-custom APUs. Nowhere does it describe AMD's position in the discrete GPU market (which isn't that great either by the way).