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Last month, we gauged the prospects of two semiconductor giants, NVIDIA Corporation (NVDA) and Intel Corporation (INTC), which have carved out their niches and cornered a significant share of the GPU and CPU domains, respectively. In this article, we have talked about another chip company and its agile efforts to grab the best of both worlds while creating a widespread following of its own.
Founded in 1968 by a group of 8 men led by the larger-than-life Jerry Sanders, Advanced Micro Devices, Inc. (AMD) released its first product in 1970 and went public in 1972. Despite starting life as a supplier for INTC, AMD parted ways with its client in the mid-80s, and by the late 80s, it reverse-engineered INTC’s products to make its own chips that were compatible with INTC’s software.
AMD existed as both a chip designer and manufacturer, at least until 2009. However, significant capex requirements associated with manufacturing, amid financial troubles in the wake of the Great Recession, compelled the company to demerge and spin off its fab to form GlobalFoundries Inc. (GFS), which has been focused on manufacturing low-end chips ever since.
With the acquisition of ATI, a major fabless chip company, in 2006, AMD began shifting its focus toward chip designing and turned to Taiwan Semiconductor Manufacturing Company Ltd. (TSM) as its exclusive chip manufacturer.
With manufacturing no longer weighing it down, AMD started catching INTC with its Zen line of CPUs. Earlier this year, the former made history by surpassing the latter’s market cap for the first time ever. Chair and CEO Dr. Lisa Su is widely credited with the turnaround and transition from being widely dismissed due to performance issues and delayed releases to being the only company in the world to design both CPUs and GPUs at scale.
We look at how Dr. Su and her team’s unwavering focus on great products, customer relations, and simplifying the company’s structure to respond to the dynamic business with agility are shaping AMD’s offerings in each product category.
CPU Portfolio
Despite a conservative outlook, AMD believes its Genoa CPU processors are superior to competitive offerings in terms of performance and efficiency across diverse workloads, including AI. During the recent AMD Data Center & AI Tech Premiere, the company expanded its EPYC server CPU portfolio by launching the highly anticipated Bergamo EPYC CPUs optimized for cloud environments.
Given the focus on single-threaded performance and energy efficiency, Meta Platforms, Inc. (META), which has collaborated with AMD to customize the design of the Bergamo server, reported seeing 2.5 times greater performance than AMD’s previous generation Milan CPUs and notable improvements in total cost of ownership (TCO).
In addition, AMD also introduced Genoa-X as another workload-optimized alternative to Genoa for faster general-purpose computing and optimal technical computing tasks. The company also updated that its upcoming server CPU product, Turin, has shown promising initial results and remains on schedule for a 2024 release.
Data Center Portfolio
According to Dr. Su, Data Center is the most strategic piece of business as far as high-performance computing is concerned. AMD underscored this commitment with the recent acquisition of data center optimization startup Pensando for $1.9 billion.
At the premiere, AMD’s ambitions to capitalize on the AI boom were loud and clear, with the launch of MI300X (a GPU-only chip) as a direct competitor to NVDA’s H100. The chip includes 8 GPUs (5nm GPUs with 6nm I/O) with 192GB of HBM3 and 5.2TB/s of memory bandwidth.
AMD believes this will allow LLMs’ inference workloads that require substantial memory to be run using fewer GPUs, which could improve the TCO compared to the H100.
Lastly, the company aims to address the growing AI accelerator market, projected to be over $30 billion in 2023 and potentially exceed $150 billion in 2027.Gaming and Other Applications.
While INTC and NVDA control most of the CPU and GPU market, respectively, AMD dominates gaming by designing 83% of gaming console processors.
The recently launched AMD Ryzen 5 5600X3D is equipped with AMD’s revolutionary 3D V-Cache technology. Despite being close to both the Ryzen 7 5800X3D and the non-3D Ryzen 5 5600X in terms of specifications, it comes with a lot of L3 cache, giving it an edge over the latter, thereby improving gaming performance.
Moreover, with Moore’s Law, which is the core of computer chip advancement, showing visible signs of a slowdown and the 5-decade-old x86 architecture gradually but surely being replaced by ARM, general-purpose computing using CPUs is making way for more customized solutions.
That has prompted AMD to acquire Xilinx for $49 billion to close one of the biggest acquisitions in semiconductor history. The investee is known for its reprogrammable adaptive chips called Field-Programmable Gate Arrays or FPGAs, which have diverse applications, such as robotics, telecommunications, agriculture, and space exploration.
As a result, AMD is expanding its footprint from PCs and supercomputers to Teslas and Mars Land Rover.
Road Ahead
Despite its future readiness, geopolitical tensions between the U.S. and China could turn out to be the Achilles heel for AMD since all of its chips are made in China and Taiwan. Also, Mainland China accounts for roughly 30% of the company’s revenues.
Dr. Su also serves on President Biden’s council of advertisers on science and technology, which pushed hard for the recent passage of the Chips and Science Act, aimed at on-shoring and de-risking semiconductor manufacturing in the interest of national security by setting aside $52 billion to incentivize companies to manufacture semiconductors domestically.
Geographical diversification, as a result of this Act, could act as a hedge against geopolitical tensions for AMD by reducing reliance on Asian manufacturing.
Bottom Line
As AMD continues to advance its x86 core computing chips along with diversifying to accommodate high-performance and customized computing, its more than 70% increase in stock price since the beginning of the year (and coincidentally during the AI wave) could be indicative of a company that is poised to gain market share and capitalize on the expanding demand for AI technology in various industries.

After months of scrambling for survival and frantic efforts to stage a turnaround, the struggling omnichannel retailer of domestic merchandise and various juvenile products, Bed Bath & Beyond Inc. (BBBYQ), succumbed to gravity earlier this year. Despite securing a financing deal on February 7, it filed for Chapter 11 bankruptcy protection on April 23.
With Holly Etlin, a longtime retail turnaround expert and a partner and managing director with advisory group AlixPartners, at the helm, BBBYQ set about liquidating assets by committing to close all of its Harmon FaceValue stores while keeping 360 namesake stores and 120 Buy Buy Baby locations open and filing motions in New Jersey bankruptcy court asking permission to auction the two brands.
However, since Buy Buy Baby, often considered a crown jewel of BBBYQ’s portfolio, was garnering the most attention and interest to unlock maximum value, BBBYQ, in a rare move, chose to run separate sale processes for its two chains. According to the company, a different method was selected to find a bidder willing to keep the banner’s stores open without the headache of taking on the assets of the namesake stores.
On June 21, online retailer Overstock.com, Inc. (OSTK) won the auction and agreed to buy Bed Bath’s intellectual property and digital assets for $21.5 million. However, the deal does not include keeping the chain’s brick-and-mortar presence alive.
Moreover, the sale price is the same as OSTK’s stalking horse bid on June 13, indicating Bed Bath didn’t receive higher or more attractive bids.
On the other hand, Buy Buy Baby, which sells baby clothes, furniture, and other goods, had courted attention from buyers even before BBBYQ threw in the towel. Consequently, since the sale began, the chain had interested buyers, such as retail investment firm Go Global and online registry platform Babylist, with the former even considering keeping its physical footprint alive.
However, given the rising costs (including leases, overhead costs, and salaries) and waning interest in keeping Buy Buy Baby’s stores open, BBBYQ decided to split the auction process further to secure a higher bid price.
On June 29, Dream on Me, a little-known baby retailer based in Piscataway, New Jersey, which sells cribs, strollers, and other baby goods through a host of retail partners, tentatively won the auction with a bid price of $15.5 million for the intellectual property, business data, internet properties, and mobile platform.
The Aftermath
OSTK, which acquired Bad Bath’s intellectual property assets but opted out of acquiring stores and inventories, has decided to change its website name by moving under the Bed Bath & Beyond domain name in the coming weeks.
The website, post its rebranding, has been relaunched in Canada. This is expected to be followed by a rollout of a website, mobile app, and loyalty program in the U.S. “weeks later.”
OSTK has also been suffering from a shift in consumer spending from discretionary household purchases to out-of-home experiences, such as traveling and dining out. According to its earnings release for the first quarter of the fiscal year, the online retailer reported revenue of $381 million and a net loss of $10 million.
However, given that OSTK has still managed to surpass estimates and the rebranding post the Bed Bath & Beyond acquisition is expected to lift its sagging sales, the stock has popped nearly 5% after it won the auction. As a result, the stock has gained 33.1% over the past month and 55.5% year-to-date.According to OSTK CEO Jonathan Johnson, “The combination of our winning asset-light business model and the high awareness and loyalty of the Bed Bath & Beyond brand will improve the customer experience and position the Company for accelerated market share growth.”
Regarding Buy Buy Baby, Dream on Me’s win for the former’s intellectual property is only tentative. However, the cancellation of the July 7 auction for the chain owing to the failure to secure a buyer willing to keep its stores running means that Dream on Me Industries is in the pole position to secure its ownership.
Road Ahead for BBBYQ
BBBYQ has been the victim of inflationary pressures and online retail altering brick-and-mortar stores in today’s economy, resulting in widespread store closures, as we discussed in our posts on May 25 and June 14.
According to Neil Saunders, a retail analyst and consultant who works as managing director of GlobalData, “If there is a single point of failure of Bed Bath and Beyond, it’s that the company stopped being relevant to consumers. Arguably, this goes back a long way, thanks to the rise of online and the improvement of home offers at rivals like Target. Against this increased competition, Bed Bath and Beyond’s approach to retail – which lacked inspiration – was found wanting.”
After the acquisition of both its brands and associated intellectual property, which were together valued at $13.4 million but have individually fetched more than double the amount, BBBYQ is left with its employees, empty stores, leases, and leftover inventory.
Any firm willing to take over will likely have to shut the stores down for a couple of months to restock and get them back up and running. Hence, without qualified and interested buyers, the leftovers appear to be more liabilities than assets.
Moreover, BBBYQ had loans with TJP Morgan Chase & Co. (JPM) and Sixth Street that were reduced in late March after its second stock offering was announced. At the time, its total revolving commitment decreased from $565 million to $300 million, and its revolving credit facility was reduced from $225 million to $175 million.
Bottomline
OSTK seems to have derived the maximum value from a distressed sale of an iconic brand.However, with significantly greater debt to service than proceeds from the sale and its once-instrumental physical assets still weighing it down, BBBYQ seems to have got the short stick in the bargain and is unlikely to have any residual value that could make holding on to the stock worthwhile for its shareholders.

During the late summer, when tropical waters are warmest, thunderstorms cluster to suck up the warm, moist air and move it high into the earth’s atmosphere. As a result, tropical circular winds spin around the eye, which is a low-pressure center 20 to 30 miles in radius characterized by eerie calm.When the tropical storm’s winds reach 74 miles per hour, these self-sustaining heat engines are called typhoons in the Pacific, cyclones in the Indian Ocean, and hurricanes in the Atlantic.
With June 1 marking the beginning of the hurricane season, these tropical storms are set to ravage the eastern seaboard. In addition to gusty winds that can wreak havoc, storm surges caused by water being pushed to the shoreline by those winds can rise 20 feet above sea level and extend for 100 miles to cause widespread loss of life and property.Moreover, with the ever-intensifying threat of global warming that’s causing sea levels to rise and the imminent spikes in global temperatures and extreme weather conditions due to the arrival of El Niño, it would be unsurprising to find hurricanes increasing in severity and climbing up the Saffir-Simpson Scale.
While hurricanes, like all natural phenomena, serve a higher purpose by circulating heat from the earth to the poles to regulate global temperatures, they have far-reaching negative implications for the broader economy and the investment world. However, there are businesses out there that thrive amid adversity by helping their customers tide over it.
Repair and restoration of homes in the aftermath of hurricanes could lead to a resurgence in the prospects of home improvement and heavy machinery businesses by deeming most of their offerings non-discretionary and indispensable.
Here are three stocks that could be propelled by hurricanes at their sails.
The Home Depot, Inc. (HD)
The home improvement retailer serves two primary customer groups: do-it-yourself (DIY) Customers and Professional Customers (Pros). Its offerings include building materials, home improvement products, lawn and garden products, repair and operations products, and associated services.Due to weak demand for big-ticket items and falling lumber prices, as consumers have delayed large projects amid rising mortgage rates and increased expenditure on services, HD missed its revenue expectations during the fiscal first quarter.
However, with the onset of the hurricane season and the tailwind of the switch from gas-powered to battery-powered outdoor tools, fueled by California’s ban on the sale of gas-powered equipment starting in 2024, and the passing of noise ordinances by an increasing number of cities and homeowners’ associations, HD has reaffirmed its fiscal 2023 guidance and established its market stability outlook.
Lowe’s Companies, Inc (LOW))
With new home purchases softening amid rising mortgage rates, home improvement projects will keep homeowners of an aging U.S. housing stock busier than usual this summer. Hence, the home improvement retailer is best positioned to make a tailwind out of this turbulence, with more than two-thirds of sales contributed by non-discretionary purchases, such as new appliances to replace broken ones.
As a result, LOW has surpassed its revenue and expectations for the first quarter of the fiscal year. Moreover, as with its peer mentioned above, the ongoing upgrade cycle driving sales of battery-powered outdoor tools has the potential to keep the momentum going.
Caterpillar Inc. (CAT)
The heavy-machinery manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives operates through its three primary segments: Construction Industries, Resource Industries, and Energy & Transportation.
While a boost in U.S. infrastructure spending kept order books full and helped CAT beat Street expectations with a 31% rise in first-quarter profit, increased restoration, relief, and rescue activity during the hurricane season could lead to a surge in demand for its construction industries segment which is engaged in supporting customers using machinery in infrastructure, forestry, and building construction.