AMD's Pipe Dream
Stocks: (AMD)(INTC)
AMD has been upgraded recently on word that its chip sales are beginning to recover and the worldwide PC and server business regain some momentum. Maybe that will last. The stock has moved from under $23 to $25.55 in just four days, a move of over 11%.
AMD commented to the Wall Street Journal that it thought that its chip sales for worldwide servers would move up to 40% by 2009. According to research firm IDC, AMD's market share in Q2 was 20.2%, up from 17.1% in the same quarter last year. Even if AMD's share rose at this rate from 2006 to 2009, its piece of the market would only be 28%.
And, then there is the road block that Intel represents. With nearly 80% of the market and its new Xeon 5100 chips shipping, it would seem unlikely that Intel, with over six times the revenue of AMD, is going to roll over.
AMD's stock has rallied on some evidence that its share is growing and the bragging of its management that the growth is about to accelerate at an almost impossible rate.
Wall St doesn't like to be fooled.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own shares in companies that he writes about.
AMD has been upgraded recently on word that its chip sales are beginning to recover and the worldwide PC and server business regain some momentum. Maybe that will last. The stock has moved from under $23 to $25.55 in just four days, a move of over 11%.
AMD commented to the Wall Street Journal that it thought that its chip sales for worldwide servers would move up to 40% by 2009. According to research firm IDC, AMD's market share in Q2 was 20.2%, up from 17.1% in the same quarter last year. Even if AMD's share rose at this rate from 2006 to 2009, its piece of the market would only be 28%.
And, then there is the road block that Intel represents. With nearly 80% of the market and its new Xeon 5100 chips shipping, it would seem unlikely that Intel, with over six times the revenue of AMD, is going to roll over.
AMD's stock has rallied on some evidence that its share is growing and the bragging of its management that the growth is about to accelerate at an almost impossible rate.
Wall St doesn't like to be fooled.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own shares in companies that he writes about.
posted by douglas mcintyre at 9:59 AM
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