The Slaughter House, Q2 Earnings Bleeders: Advanced Micro Devices (AMD)
June 18, 2007 by Douglas A. McIntyreAMD’s (AMD) problems seem to get worse by the day. Intel (INTC) sales of its Xeon sales have improved at the expense of the AMD Opteron. Jon Peddie Research reports that AMD’s presence in the workstation market shrank in Q1.
Intel also cut the price of one of its best-selling chips, the Core 2 Duo, by 50%. BusinessWeek.com speculates the move may be to undercut sales of AMD’s new Barcelona chip, sales that AMD desperately needs to turn its fortunes around. There have also been media reports that Barcelona may be late to market.
Intel’s shares were also upgraded recently by Goldman Sachs on the supposition the AMD would have to begin to outsource its chip manufacturing. According to MarketWatch: Goldman said such a move by AMD would make it easier for Intel to "retain a sustainable product advantage," given the difficulty AMD will face in optimizing technology.
It is fairly rare that so many signs in such a short period point to more rough news in upcoming quarters. But, Wall St. does not like to look foolish. AMD’s shares have fallen from $15.75 to $13.52 in the last month, a drop of 14%.
"It’s an ill wind that blows no good."
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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