AMD (NYSE: AMD) will release its powerful new Barcelona chip today. The chip is a "quad core", meaning that it has four processor on one platform. The new product is aimed at high-end servers and PCs and is being shipped in products from Dell (NASDAQ: DELL), HP (NYSE: HPQ) and Sun (NASDAQ: JAVA).
Larger rival Intel (NASDAQ: INTC) has taken much of the server market away from Advanced Micro over the last year or so. Barcelona is a bid to get that back. Nathan Brookwood, an analyst with Insight 64 told Reuters, "The stakes here are for AMD to staunch the erosion in its marketshare and to once again go on the offensive against Intel."
For Advanced Micro, it may be too late. The company has been left for stock market "road kill" by investors. Shares of the company were above $42 in early 2006. They now change hands below $13. The company took on a great deal of debt when it bought chip company ATI. Wall Street has been concerned that AMD will have trouble paying down that debt. The No.2 x86 processor company has also lost its top two sales executives in the last month.
The markets will know fairly soon if Barcelona is gaining share. Several research firms track chip sales in PCs and servers. Intel has already introduced its own "quad core" products.
If Barcelona does not do well, it is likely that the company will see major management changes and that ATI and other businesses may have to be sold off. Things are that dark for Advanced Micro.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
9-10-2007 @ 11:14AM
Jim Kirksey said...
AMD is supported by a competent Board of Directors
and key executives that hold their position due to
many years of experience and proven records of working through a variety of trying downside
situations as well as many successes. Now is a buying
opportunity as they regain positive momentum.
9-11-2007 @ 10:42AM
Gumby said...
Everyone is not stupid enough to let Intel crush AMD and be done away with it. Everyone will buy AMD chips to keep it going and making profits once in a while to keep alive. AMD will reward shareholders far more than Intel ever will. Intel can go up to 40 at most for just 50% gain while AMD can easily go back to 40 and higher for 200-300% gain every few years. AMD will never disappear. AMD has talented people working there and building Fabs as of now. AMD will always sell graphics cards by ATI made in Fabs that can make x86 as well. AMD can stop relying on Sigapore Fabs to help with producitioin. What youa re seeing is AMD undergoing growth pains.
9-11-2007 @ 10:44AM
Gumby said...
Douggy
AMD bought ATI because AMD will intergrate ATI graphics into x86 chips . Intel did with Centrinos where wifi was integrated while AMD didnt. AMD will have something that Intel dont.... I am amazed that AMD would acquire ATI and taking in debt for that. AMD has a plan not a nightmare.
9-16-2007 @ 3:46AM
eddie said...
you could see it a couple of years ago. amd was cruisin and intc was out of sync. you knew intc would do everything legal and illegal to get back its market share against hated rival amd. now everyone thinks amd is dead. do people actually believe that the big box makers will stop buying amd chips and possibly put them out of business. that would leave intc alone at the top with no competition. intc would no longer be forced to price its chips competitively and that would mean rising chip costs for the box makers. that will not happen because box makers will buy a large number of amd chips to prevent it. its not like amd chips arent every bit as good as intc. amd will be back and the stock will probably see 20 in late spring of 08.