Imagine software that allows servers to run several programs simultaneously and use more of their chip power. Forget imagining because the software is already in the market.
"Vitalization",as it is called, is allowing data centers to cut back on the number of servers that they need. Worldwide server growth was only 1.1% in the fourth quarter, according to research firm DC. The technique is only used in a small number of companies, but if the savings are good, that could change.
AMID (AMD) which now trades at a multi-year low and said it will miss its Q1 forecasts, doesn’t need any more bad news. Intel (INTC), which has laid off thousands of workers, has indicated that competition in chip pricing is still pressuring margins.
Server sales are big business for AMD and Intel, and that business may be about to get worse.
Douglas A. McIntyre can be reached at douglasamcintyre@247wall st.com. He does not own securities in companies that he writes about.
Top Gaining Stocks
Top Losing Stocks