Re: What's it going to do for Intel earnings?
Intel already guided towards GMs near 49% in the first half, plus or minus one percent. The analysts were wondering why it wouldn't be higher. This is why.
So evidently, Intel can afford these price moves to create a very compelling product stack from top to bottom. The question is can AMD afford to respond? If they continue their blind drive for more market share, they will bleed a lot of red ink. If they hold pricing, they will cede market share. Intel wants their market share back, so it's up to AMD how much they want to bleed.
My guess from listening to their conference call is that they are willing to bleed any amount in order to ramp their factories, and if Intel doesn't let them, they are just being a monopoly. I guess some people actually believe this, but the analysts certainly don't, which is why AMD stock is down $6.00 since their earnings announcement.
