AMD (AMD) At The Rally's End
AMD (AMD) was a fairly exciting stock for a few weeks. After bottoming just below $13 on May 8, the stock ran up and traded above $15 for a few days. At one point the stock was up about 20% over a period of a week. The company brought in new financing and agreed to fire a few hundred people. There were rumors that some AMD’s less strategic business segments might be sold off.
But, Intel (INTC) introduced a new chip line last week, and word walked around Wall St. that some of AMD’s new customers wins came due to deep discounting. The impression returned that the war of attrition between the two processor companies was going to continue.
To really kill the AMD rally, Stifel Nicolaus came out with a research note saying that AMD vendors were told the new Barcelona chip would be late to market. An analyst at Citi said fundamentally the same thing. AMD’s shares were routed like Napoleon at Waterloo. The shares have fallen 2.6% today, and are back at $13.61.
Douglas A. McIntyre can be reached at firstname.lastname@example.org. He does not own securities in companies that he writes about.