AMD Share price MELTS DOWN!!!

With development costs in the billions and the economy getting worse (or at least not showing signs of improving), how long will CPU prices stay where they are? What will prices be like in a year? It seems like the profit margin for CPU's is just not that great anymore and not a huge source of revenue. It seems that something needs to change (and probably not for the consumer good). In the end, it looks like Intel is winning the price war, even though their chips are more expensive.

<A HREF="http://www.thestreet.com/_yahoo/stocks/carolinehumer/1482164.html" target="_new">http://www.thestreet.com/_yahoo/stocks/carolinehumer/1482164.html</A>

<A HREF="http://www.thestreet.com/stocks/carolinehumer/1479552.html" target="_new">http://www.thestreet.com/stocks/carolinehumer/1479552.html</A>

"it is estimating second quarter net income of $0.03 to $0.05 per diluted share."

The problem with this though is that the street consensus estimate was .27 per diluted share, that is a HUGE miss and bad news for AMD. This is compared to a reported .61 a year ago for the same quarter. This is more than just the results of the economy slow down. AMD is sinking fast.

<A HREF="http://biz.yahoo.com/smart/010706/20010705051734breanews.html" target="_new">http://biz.yahoo.com/smart/010706/20010705051734breanews.html</A>

"AMD said in a statement last night that Intel price pressure was responsible for the shortfall in its expected sales. µ"

Heh, AMD is finding out that it requires capitol to make R&D work, not just firing guys in QA.

I sure would hate to see AMD prices go up becuse they are strapped for cash =P

AMD devalued their cpus, saturated the market(out of spite) this is why the overall market is down.

btw, you can moan and bitch at me or the Inq but the facts are facts, this is not speculation! Amd is dropping like a burnt tbird out of the sky.

<A HREF="http://finance.yahoo.com/quotes?symbols=amd" target="_new">http://finance.yahoo.com/quotes?symbols=amd</A>

sure, like all stocks can rebound and it's great to buy at a low price but facts are facts-Don't kill the messenger!

I know if Intel dropped like that(25%) you pups will jump all over it, well I guess we'll wait on that huh? you'll have to wait your turn ok.

"AMD/VIA...you <i>still</i> are the weakest link, good bye!"

[quote]...facts are facts, this is not speculation! Amd is dropping like a burnt tbird out of the sky.[/quote[

The dictionary must have changed the definition of speculation since the last time I looked it up.

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My Athlon can beat your Ferrari off the line.

How could this happen, with human power? I believe, long ago, extra terrestrials visited our ancient civilizations. The extra terrestrials ships' engines produced about 70733.3 pounds of thrust (I know this because the grass around ancient Inka temples is impacted at aproximately 4.334cm lower than normal grass.) This somehow must be connected to the price drop! 70733.3 x 90 (there were 90 aliens on the ship!) x 3 (they had three nostrils) = $19.09 which is very close to 21.22! I believe the only explaination for this is that extra terrestrials visited our planet tousands of years ago.

Before those anti-competition trolls getting too excited, let me remind them the following:
1. Intel actually has a bigger drop in Q2 revenue percentage wise. It just announced earlier (back in April) than AMD. And Intel's stock took a hit as well. It was $35 in Feb '01, but by early April it's down to $23. That is a 34% drop. The key part of AMD's problem appears to be overestimate of flash memory revenue. Remember AMD signed a long-term deal last year with Alcatel to supply Alcatel flash memory, but Alcatel had to break it this year because the market situation.
2. The CPU price drop certainly has an impact on AMD's (and Intel's) bottom line. However, despite those "deep" price cuts, CPU is still one of the most profitable silicon IC products. As long as AMD can move CPU chips, it will be OK.
3. In fact, based on various reports, AMD appears to be selling more Athlon and Duron chips than ever before. Since the PC market is not exactly flourishing, it means AMD chips are actually gaining widely acceptance, in all likelihood at the expense of Intel chips.
4. As long as AMD chips remain competitive, Intel can never go back to the days charging an arm and a leg for the latest CPU. In fact, the days of 65% gross margin are gone for Intel. Without high gross margin and good earnings (only $0.53 per share for this year based on Intel's guidelines), Intel will have a hard time to justify its P/E ratio and market cap.

Nothing will please those trolls more if AMD (and other competitors) drops out so they can go back to the days Intel is a de facto monopoly. However, AMD is NOT going away no matter how they curse it. They'd better learn to live with it.

**Spin all you want, but we the paying consumers will have the final word**