AMD's miserable week - Top Stocks
 
Search Top Stocks:

AMD's miserable week

Posted Apr 08 2008, 04:36 PM by Kim Peterson
Filed under: ,
Rating:

AMD investors are banging their heads against the wall again today after the chipmaker said first-quarter sales will disappoint Wall Street. Shares fell 5% today to $6.03. A year ago AMD traded in the $13 range; two years ago the stock was at $34.

AMD also said it will cut about 1,700 jobs, or 10% of its work force. It estimated first-quarter revenue to be $1.5 billion, not the $1.62 billion analysts were looking for.

The economy is certainly to blame, but could Dell be a culprit as well? Citigroup analyst Glen Yeung said in a note that Dell is reducing its exposure to AMD, which is contributing to AMD's current woes. Yeung said he didn't know if Dell had completely bailed from the AMD camp, however.

More troubling for AMD is that it continues to be creamed by Intel. AMD is months behind its rival on the rollout of certain products, and it's having a tough time catching up. Its snazzy new Barcelona chip was supposed to be a lifesaver, but AMD hasn't been able to deliver it in volume until recently.

Analysts are pretty down on the company. James Covello at Goldman Sachs said AMD's business model "remains structurally broken." John Lau at Jefferies & Co. said he's cautious because of AMD's delays, its competition and its weak cash position. And Cody Acree at Stifel Nicolaus said AMD's products are "sub-par."

AMD reports its Q1 earnings on April 17. It's sad to see a company in such a bleak spiral. And the worst may still be ahead; some analysts think shares could drop even lower.

It's admirable that AMD has stuck with chief executive Hector Ruiz through these tough times. I hate to jump on the reactionary bandwagon, but I wonder how bad things will have to get before AMD's board starts to have doubts about the company's executive leadership.

Comments

 

Poor product against a competitor who is banging on all cylinders.

I read something about intells monoply overseas.  Amd was fighting for equal treatment in India as the government was stressing only buy intel.  I do not know if it was resolved.   AMD has good chips.  I have been using them since 1991.  Fair trade tactics would help.  I would not buy an intel processor because in my opinion their fair trade tactics are not honorable.    The article also pointed out that it would be to intels advantage to keep amd in business so we do not have a monopoly.   Amd has to lobby with the governments to buy their processors.  All this takes money and the analogy is David fighting Goliath.    The leadership is not a David.

Dell's T105 server uses AMD opteron processor, not a bad buy.

Another comment.  I am a small shareholder of Dell and HP.  HP has given Dell a run for the money in sales of computers.  Dell is not number one anymore.  They were slow to react.  Finally ther computers are in retail stores.  They are trying to recover.  Intels processors were really not ready for Vista.  Microsoft accomadated Intel with their processor so it would run Vista but not all versions.  The dual core proceesor which came out after vista was realeasedand  will run other versions.  Was AMD given the same accomodations?   I am also a small sharehold of Micorsoft for years but that doesn't mean I agree with their tactics.    AMD has to address these issues in order to compete.

That's what I have been telling everyone for years.  AMD stole the 386 technology from Intel, bypassing their licensing contractual agreement.  Intel's quality control is far superior, Intel does not push a product's performance as AMD does, this translates into almost no failures.

Anyways, who cares about DELL, they stole everyone's customers, now it is their turn to feel the pain.  Michael, get a college education.

I do not own Intel stock anymore, I do not understand why it has been flat for the last 5 years.

Sad to see so much promise and marketing (and investors' dollars) go straight down the toilet.  Of course, what goes down must come up -

Uhm, as a PC builder for personal use (gaming, servers) as well as for friends and family (general use), I can tell you that AMD lost to Intel back in 2006 when the Core 2 Duo processors came out, and haven't caught up yet. In fact, Intel is so cocky these days they are intentionally withholding their 45nm Wolfdate processors.

Get with the program AMD! Even though I prefer Intel, the users will lose without your competition like you gave for so many years (and beat Intel with).

  Take a look at Hector's track record in previous positions.

I have built computers for years ( my own) and have never had a problem with AMD chips. Price and quality wise, they are the best value. I don't get hung up on the benchmarks, because in a practical use, benchmarks don't really come in to play Give me something that is reliable at a reasonable price and I'm happy. Given AMD produces a quality product at a good value price, I guess I don't understand why they are not used more. Do I smell fish??????

I won't buy Dell products because of their business practices. They move into a community to get the tax breaks and other perks, promising lots of wonderful high paying jobs, and then bail overnight leaving a community without a clue. Word gets around and I know others who won't buy their products for the same reasons.

Send a Comment

Comments must be directly related to the blog entry. Comments with offensive language will be deleted. Your e-mail address won't be displayed.

(please, no HTML tags. Web addresses will be hyperlinked):