Consensus is still around $41M, right in the middle of the range.
I'm starting to believe that what will get AMCC "there" is not only a good ARM design, but they have now been asked (and paid) by someone to do the PAM4 design. They are making both the processors and the interconnects, the processors and a significant piece of the hardware eco-system. I'm reading this as a good thing. If they do this right, they can define a lot of the eco-system in their favor. I'm starting to understand why one of the analysts asked Gopi a few quarters back if he would sell the telecom part of the business and why he said "No". AMCC has the ability to build more of the infrastructure with its telecom background than just some company making knock-off ARM chips. For this reason, I see them as being in a better position that QCOM, even with QCOM's experience with ARM in the mobile environment. It might have even been QCOM who recognized this and put the analyst up to asking the question. Perhaps Gopi is waiting for a more reasonable number once shares appreciate that he can ask for AMCC, and perhaps so is QCOM. Paying a multiple of AMCC's current share price would have QCOM's shareholders in revolt.
Companies like MRVL and AVGO (Broadcom) have the resources to approach the market, but got a late start. QCOM has the processor technology, but not the interconnect experience. CAVM has both, and has decided to pursue the data center, but mostly from within the niche market of security. If they get more, then that's wonderful. INTC worries me because they have such deep pockets, they can just keep throwing money at you all day long, no matter how stupid their decisions might seem, sooner or later something will stick.
As always, this is an optimization problem with missing information. AMCC is in a good position though.
Post by christopher on Apr 11, 2016 12:06:07 GMT -5
At the present, there is NO money flowing into AMCC at all!
Actually, I would expect that there hasn't been money flowing into AMCC since mid last summer,
except for the very few smaller funds you see advertised that usually do not hang around for very long.
If revenue continues to climb quarter after quarter(which it has), then one would expect that investors will have to be showing some interest at some point.
It looks as though the share price is being kept below $6.50, until Q4 revenue is released? maybe to give it a real reason to climb up and over $7? no real answers here, all ?
Last Edit: Apr 11, 2016 16:53:08 GMT -5 by christopher
If AMCC can make their numbers, in spite of what CAVM claims is tough-going for the "data center" market, I think it will have a good to neutral effect on share price.
Also, everyone, AMCC included, claims, "INTC is our only competitor". Really? What about among ARM competitors in the data center? ARM is to some degree its own market as well. What about "first-mover advantage"? INTC is the only competition is one "talking point" I'm tired of hearing.
