Spokeshave, I can't argue with you there.
INTC seems to be a "loser" in many respects. Although, 5 years back, they were clearly "winners" compared to AMD, and despite AMD's best efforts to climb above their previous values, they seem to be in a similar relative position compared to INTC. As far as investors are concerned, it seems the relative difference in valuation between INTC and AMD has not changed much over a 5 year period.
The question is whether either of these stocks deserve their current valuations. AMD investors will argue that AMD is in a stronger position now than 5 years ago, and this should warrant a smaller relative valuation (i.e. AMD closer to INTC valuation, rather than the other way around - it's the bashers that argue that INTC should be lowered to AMD valuations, rather than the other way around).
My opinion is that AMD's future is as uncertain as it was 5 years ago, with the company experiencing huge losses quarter after quarter, and profitability pretty much requiring a market turnaround, *and* a much more competitive product line. For INTC, I think they can continue to make money for as long as this downturn extends. It may be much smaller than INTC is used to, and thus one can expect lower valuations to match a smaller growth trend.
But, in my honest opinion, I see demand for processors picking up at double-digit CAGR. These won't just be in consumer PCs, but also in recovering businesses, mobile and enterprise segments, and emerging markets. I think Intel can continue to sell processors, simply because they are multi-purpose enough to be made to fit in newer usage models. I think there are a ton of people that would be interested in smaller form-factor PCs with noiseless fans that take up a small fraction of desk space, or in thinner, lighter laptops powered by Banias processors. I think the enterprise is trending towards Itanium 2 adoption, too, and that means even more sales. And that's not even counting Intel's other businesses, which should experience profitability as soon as Internet infrastructure begins to pick up again.
But again, it all depends on when things pick up. I don't think they will stay down forever, but I am waiting for the right time to reinvest. If the bears take INTC stock down to single digits, all the better for me, since I will be able to buy more of it.
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