I'm also uncertain, from the various data points and opinions, on the 4Q. With 8-9 million AMD chips and 35 million Intel chips, will too many microprocessors be chasing too few PC's? And Intel specific, can server growth take up any slack.
I'm less worried about AMD, there's more wiggle room in their valuation than there is in Intel's.
John,
Maybe our respective worrying is proportional to the number of shares we have of each stock; consequently I am more worried that AMD's stock may be headed for trouble while your concern is with Intel.
I am becoming more and more convinced that Intel's production is up to speed now at least to 1G level, and that capacity constraint is an issue of the past. While PC sales seem to be doing well as evidenced by the link below, apparently the production by both AMD and Intel may be too much for the market to absorb. If that's the case, then AMD is more likely to suffer at least in terms of overall sales. Offsetting that would be the higher than Q2 ASP's expected by AMD.
smartmoney.com
"Friday delivered a positive edition of 'The Boswell Report,' a monthly survey of about 200 U.S. electronics stores published by market researcher Allison Boswell Consulting. According to the Boswell data, PC retail-unit sales in August jumped a surprising 59.6% from July, with average selling prices declining a negligible 0.1% sequentially. Intel-based PCs did even better than the overall average, jumping 67.2% sequentially and 136.1% from a year earlier."
I concur with Scumbria's comment on the mod thread that
with all things being equal, the consumer will buy Intel before he/she buys AMD. That's why speed grades are so important to AMD.
Bottom line: I believe the stocks of AMD and Intel are both vulnerable. However I think what will save them is something seemingly unrelated...OPEC's recent announcement of a boost in production. The fear of oil inflation has hung over the market for some months now....with the increased production, crude can drop below $30. That will serve to mitigate the inflation fears, creating a more bullish market environment, and allow tech stocks to rally including AMD and Intel.
Like they say, it is time to buy when most are bearish on a stock.....so maybe its time to buy more AMD and Intel.
Its interesting how I managed to get to that conclusion, don't you think?
ted |
