A Golden Opportunity in AMD and Mondelez
I felt quite reasonable to go ahead with fresh purchases of AMD and Mondelez stocks at nearly 5% and 3.5% discounted prices, respectively. The Wall Street crowd's negative response to the set of very convincing quarterly numbers gave many traders this chance which I considered as a golden opportunity, especially in case of the AMD rally, which I do not expect to be halted for too long. As for Google, I am planning to do the same trick, but a little later. I don't believe ad sales is a horror story, but some part of the crowd may believe and prefer to watch on the sidelines. Again, let's not forget that I still have a lot of Google stocks bought from a $125-127 area.
AMD dropped in today's pre-market to $162.66, which formed a 9.6% price gap vs its all-time highs above $180. However, the profit in Q4 gave $0.77 per share, exactly in line with expert consensus (which did not allow it to produce any wow effects), yet it was 10% up to the previous AMD own record number. In terms of quarterly revenue, the company announced $6.2 billion vs 6.13 billion of consensus estimates, not a big surplus in this context, but actually meaning a 10.7% YoY. If this is disappointing, then what could be called inspiration?
A supposedly sad fact was only that AMD expect next quarter's revenue at $5.4 billion, up or down by $300 million, compared with analysts' average estimate of $5.73 billion. However, I prefer the company's own forecasts rather than expert heightened estimates, which may be sometimes not that accurate. Other AMD announcements still sound great, like a supposed supply of AI chips "well above" $2 billion in 2024, compared to last quarter's AI chip sales of $400 million. AMD forecast is Q1 2024 margin of about 52%, compared with the expert estimates of about 51.7%. "Demand for our high-performance data centre product portfolio continues to accelerate, to deliver strong annual growth in what is an incredibly exciting time as AI re-shapes virtually every part of the computing market," AMD CEO Lisa Su commented, and these are all direct evidences of the segment's strength from the second largest AI chip maker of the world in the AI epoch. I see only fringe concerns on the other scale.
Besides, I preferred to use a chance to buy shares of Mondelez (MDLZ) chocolate monster factory, as soon as the market gave me a good entering price below $74.5 per share in the first minutes after the open bell. That was not because I like honey and almond Toblerone and Belvita cookies (though, this is true), but due to actually strong quarterly numbers. A partial drop in the so-called "organic" sales means in practice only that 5% less of some goods from the enormous line-up of Mondelez goodies were sold for 7% higher price. That's not so bad, in terms of logistics, if the company managed to make more money from less chocolate bars or crackers sold. I don't think that people addicted to those cookies or chocolate (to the extent that your humble servant is addicted) would ruin their breakfast mood for the whole day to save mere pennies. Bet, they will not do it. I still see the target price of at least around $78.5 or even $80 for Mondelez, which may give me from 5% to 7.5% on invested capital.
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