Replies to post #78452 on Advanced Micro Devices Inc (AMD)

[tecate]

Wow talk about generalities on your part... this is business, not a tea party. Intel retaining marketshare is just a way of life in the big bad mpu war.

http://www.smartmoney.com/Techsmart/index.cfm?story=20070117&afl=yahoo&pgnum=1

An unfortunate by-product of oligopolies, price wars wreak havoc on companies by squeezing profit margins and, in some cases, forcing dramatic cost cuts. As shown by Intel's fourth-quarter report Tuesday evening, surviving such a battle is no easy feat. Intel's quarterly earnings fell a shocking 39% from the same period a year ago, despite the sale of a record number of microprocessors and flash memory chips. In addition to pricing pressure, a good chunk of the loss was due to restructuring charges, as well as factory start-up and factory underutilization charges.

Intel's execs warned that the price wars with AMD will continue in 2007 and provided a cautious outlook that

[wbmw]

Re: Intel has gone backwards in share price and cash reserves since he took over in May 2005, no mean feat considering all the technical advances you listed off

Otellini cannot control Intel's share price any more than Ruiz can control AMD's. If you're under any other impression, then you have a gross misunderstanding of how the stock market works.

As for cash reserves, if you bothered to look, you'd see that Intel's are up sequentially, while the number of outstanding shares is down. That's right... while AMD has been diluting their stock at an alarming rate, Otellini has been reducing the number of outstanding Intel shares to a more reasonable level. Year on year, it's been substantially reduced, and yet cash reserves remain strong in spite of all the buyback.

The best that Otellini can do is make sure the ship is sailing in the right direction, which is evidenced by everything I described in my previous post. From a product, process, cost, financial, and roadmap perspective, Intel is hitting on all cylinders, while AMD is failing at every metric. Analysts gave Intel a target for how much they thought they would do, and Otellini beat it. They also gave AMD a target, and Ruiz warned.... :-)

Now, do you think Ruiz will keep to his other targets, as described in AMD's analyst conference? They've already botched revenues and ASPs, but will they come up with other surprises? How do you think the stock market will respond to their announcement? I have my money in AMD PUTS right now, and I couldn't be happier. ;-)