Advanced Micro Devices Inc (AMD)

[bobs10]

When one looks at AMD and INTC over the last 8 years or so the one thing that stands out is the quality of management at both companies. Without a doubt this has been the biggest factor in the sea change that has taken place in the prospects of both companies.

Starting with Jerry and continuing through Hector, in hindsight, there has been a virtually unbroken stream or very prescient decisions made. On the other hand looking at INTC one has to go back to Xerox and to a lesser extent IBM, back in the 70s to find technology companies that so dominated their industries and imploded as hard as INTC is about to.

Without a doubt the decisions made under Barrett's watch were some of the worst imaginable, bordering on corporate malfeasance. In particular the decision to offer illegal incentives after the initial success of the Athlon and the decision to try and replace the X86 architecture with the Itanium ISA are perhaps the most glaring examples of a morally corrupt management completely devoid of ideas.

What we are watching is the latest installment in the corporate life-cycle game. No matter how high they rise all companies eventually fall. They may not land on their swords immediately, but staying on top has proven an impossible task over and over again. What we're watching is just the initial phase in INTC's transformation. So far not much has happened, and not much will happen until events overtake the corporate mindset. From an AMD point of view this is good news as it ensures that INTC won't be able to adequately respond to AMD's challenge for some time. From an INTC point of view it just means that they will continue to fall further and further behind.

After 50+ years of playing the stock market this is all de-ja vu. Having said that though it’s worth noting that things are never exactly the same.