Intel Corp (INTC)

[The Duke of URL]

AMD (AMD) was up about 6% yesterday on an analyst upgrade from Stifel Nicolaus. The major reason for the upgrade was that "the worst was behind the company."

Maybe not. Later in the day AG Edwards released a report on Intel (INTC) The bank said that Intel's new architecture made its chips inherently faster than AMD's. The new AMD chip called "Barcelona" will be "brushed aside by manufacturing improvements by Intel."

Perhaps Edwards saw the earlier report and decided to rebut it. Or, their beliefs may be long-held. Either way, the AMD longer term stock price indicates that the recent movement may be a sucker rally. Over that last six months, AMD shares are down almost 30% while Intel's have increased close to 20%.

Securities analysts fall prey to the same mistake that investors often make. A stock that is down a great deal, especially a stock in a large company that has done well in the fairly recent past, must be cheap at some point as its price falls.

Making that assumption with AMD would be a mistake.

Douglas A. McIntyre can be reached at [e-mail].

http://www.247wallst.com/2007/06/amds-amd-rally-.html