INTC vs. AMD
AMD's $9 pop beat Intel's $10 on a percentage basis, and it's now up about 75% since my infamous buy recommendation at the end of March. Monkey, shmonkey, that spanks our gorillas quite handily...
First of all, let me say that I owned AMD in the mid-90s, and enjoyed a nice profit. I'm currently long INTC.
As a non-AMD-O'phile, my general sense of things is that AMD seems to be on a roll. They are competing head-on with INTC in the lower end, and creeping into the middle end of the PC-microprocessor market.
INTC mavens have warned that AMD doesn't have the FAB capacity to meet ever greater demands on AMD's apparently very good microprocessor offerings. But to date, AMD has not yet had product shortages of which I am aware. In fact, INTC has come up short in production of sufficient quantities on some of its product offerings, and as I posted earlier is working double-time to vastly increase its already world-leading edge in FAB capacity.
INTC mavens also warn that with rising interest rates, retail PC demand may be curtailed......and this will hurt AMD more than INTC since the Silverback has diversified into servers, cell phones, networking chips, etc. They warn that AMD is entirely dependent on the PC microprocessor retail market.
This latter point may be the sharp distinction between INTC's silverback position and AMD's chimp position. The other distinction is that INTC can play the price-cut game and blow out AMD's profit margins, as they have done in the past.
Right now, everyone is rolling in dough and business, and price margins have not eroded. Too much business for everyone. It's a great time to be a semiconductor manufacturer. Also, letting AMD have 15% of the market share has been enough to keep away the DOJ.
I just hope INTC management doesn't get complacent like Boeing; in the past 12 months, Airbus has sold more planes than Boeing for the very first time. What was a field with just one worldwide, unchallenged dominant manufacturer of planes (Boeing),.... has now become a 2-horse race. Stupid, stupid, stupid Boeing, responsible for the largest niche of export $ to the USA, let Airbus get into the Game.
Apparently Boeing's management never read "Only the Paranoid Survive".
Apollo |
