Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Thursday, August 17, 2006

AMD Stays On The Ropes

Stocks: (AMD)(INTC)(HPQ)(DELL)

Citigroup upgraded AMD on the theory that the PC market has bottomed. A survey of Asian markets indicated that sales may be getting better in Asia.

It's a nice theory, but what about the rest of the world? And, pricing pressure from Intel has not exactly abated. AMD's market share has risen somewhat, but that is very old news.

The steel cage death match between the two bog PC chip makers continues. AMD has tried to get a small edge by upgrading its flagship Operton chips adding about 10% to computing power. But, Intel with be in the market with its dual core product in less than a quarter. Cowen & Company recently initiated AMD at "neutral" on the basis of the fact that its share of market has hit a peak. The upgraded chip won't help.

If you look to Hewlett-Packard's numbers, desktop sales were fairly flat. Workstation and laptop sales rose modestly. So, it is somewhat difficult to see the strong demand for PC chips in those numbers.

AMD's stock is up 38% from its low in late July. That is a very healthy run on a modest amount of news.

If Dell's figures show a sharp increase in purchases of PCs, it may be time to have another look at AMD. But, not yet.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

Powered by Blogger