Advanced Micro Devices Inc (AMD)

[bobs10]

Keith, Chipguy

Most of the price damage has probably been done. Unless there is a worldwide pandemic killing PC buyers off, as INTC has asserted, AMD should have a reasonably good quarter. Personally, I'm inclined to believed that non-business demand is probably slowing somewhat, but I also tend to believe that the advantages AMD has will be enough to offset any expected slow down. These advantages include slightly higher ASP's due to repackaging k7s as Semprons and the continuing move to selling more k8s. Also, q3 costs should start showing the effects of the move to 90nm and volume should be increasing as AMD takes more market share from INTC.

Right now Yahoo has analysts estimates at $.14 for AMD, but I fully expect those estimates to drop to the $.10 to $.12 range by the end of the quarter, thanks to INTC. However, I still think AMD has a pretty good shot at doing $.20, especially if INTC comes in at the low end of their current estimates.

I keep harping on this, but given the very fixed cost nature of AMD's business it doesn't take all that many more processor sales for AMD to go from making $.14 to making $.20.