The Micro has gone Macro

If you haven’t heard of Advanced Micro Devices (AMD) before today, well then you’re about to. AMD is a global manufacturer of computer hardware – specifically bits like motherboard chipsets, graphics processors and flash memories. In other words, their products sit inside the things you own without you knowing it.

What’s got them in the news is not their hardware, but their share price, which has rocketed by over 100% this year. Analysts monitoring the company have noted 17 occasions when big money has been in play for AMD shares, meaning volume trades are driving the upward track. Whether that is one institutional player building up a strong position, or a few of them, who knows. But it hasn’t gone unnoticed. 

The question analysts are asking, though, is what is driving the hype? The firm itself is currently valued at a whopping $45 billion, with net income of $120m in its last reporting quarter. So it’s not its financials triggering the bulls. AMD appears to be benefiting from a series of recently announced deals with other tech players including Google, Dell, Twitter, Microsoft and Lenovo, while HP unveiled its first AMD-powered gaming laptop. There are mixed views on whether the share price is a fair reflection of value, but more will be known come February when it’s next earnings report is released. In a fiercely fought market, their ongoing battle with rivals Intel and Nvidia (NVDA) will make for good viewing heading into a new year.

Fire in the bowel

Getting on board with small biotech firms dependent on regulatory approval to get to market can make for a sweaty journey. But investors have been paying attention to Ardelyx (ARDX) for some time now, firstly running with the hype that it would get its irritable bowel drug Ibresla through the US Food and Drug Administration (FDA), and then cashing out when it did. The result has been somewhat of a sloppy ride for its share price, but one that has trended up this past year. 

Market researcher EvaluatePharma has thrown a figure of $700m out there as the potential annual revenue for Ibresla through to 2024. However, in the drugs market, it is somewhat of a punt to try and predict how physicians and patients will respond. 

There is potentially further good news coming for Ardelyx, which is keeping Wall Street bellies rumbling with interest in its future prospects. It has reported positive results from its clinical trial of another drug that aims to help dialysis patients suffering from a build-up of phosphate – a condition known colloquially as hyperphosphatemia. It hopes to file for FDA approval for this drug next year, which, if successful, would see it launch two new products into the market in quick succession while still in a cash-healthy position thanks to its investors. Good luck to them and their hopefully soon to be slightly less irritable customers.

The Golden Cycle

Metals fans are feeling juiced right now, with predictions running through the market that a golden winter (well summer for us) is set to spring forth. Analysts who track the gold price point to the historical six-month trading cycle as being more predictable than Federer walking into a grand slam quarterfinal. 

The last 6-month low of $1267 was in May this year before gold reverted to normal play and carried north until September. Market watchers are anticipating it bottoming out again in early December before resetting its course to challenge the $1600 mark. You can never pick the exact moment it touches the bottom of this cyclical bucket, especially in an age of highly reactionary markets that jump at the latest chirping from Twitter. Still, it won’t stop investors from trying to pick that optimum point. 

Gold is also predicted to become the home of more risk-averse investors worried about a market correction looking into 2020. With some investors concerned that cheap lending and low-interest rates have driven a lot of share market action, they see upside in looking for more stable options for their cash particularly if you have the long game in mind. 

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