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    AMD’s Troubles Continue… For Now

    By Stock Charts | April 3, 2007




    Only about a year ago, AMD’s stock was hitting 52 week highs. Their aggressive moves with their Opteron 64-bit processor had boosted their share of the server/workstation sector from a paltry 2.8% in 2003 to 27% in 2006. They had just formed a partnership with Dell, and it seemed that every report was showing increased market share. Things were looking pretty bright for the chipmaking underdog. Here’s AMD’s chart for the past 2 years:

    amd_033007.png

    The fall from grace has been long and painful. Looking at the chart, it would seem that the troubles began around March of last year. Since then AMD has been continually lowering guidance and missing analysts’ expectations. A recent pricing war and Intel’s introduction of their Core 2 processors—which are far superior to AMD’s Athlon and Opteron chips in performance, performance per watt, and other price/performance metrics. However, the situation may change in a few months when AMD releases it’s new chips, code named Barcelona.

    Another problem for many investors has been AMD’s acquisition of ATI last fall. While the deal has yet to show any real returns, there is strong potential for the future. ATI makes the chips for both the Xbox 360 as well as the Nintendo Wii, both of which are vastly outperforming the lagging Playstation 3. In addition,  having both the processor as well as the graphics chip designer under one roof can only be beneficial in maximizing synergy, performance and efficiency.

    While AMD is clearly losing this round, the fight is far from over. In the mean time, I’ll be keeping a close watch for a bottom to AMD’s battered stock. In the words of Rocky, “It’s not about how hard you can hit, it’s about how hard you can get hit and keep moving forward.”

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    Topics: Stock Charts | 1 Comment »

    One Response to “AMD’s Troubles Continue… For Now”

    1. AMD Announces New “Barcelona” 8-Core Chips » Market Matador - The Latest Financial Resource on the Web! Says:
      May 16th, 2007 at 4:30 am

      [...] Micro Devices (AMD) has been hit pretty hard over the past year or so after Intel’s (INTC) introduction of their Core 2 processors and the subsequent pricing [...]

    Comments