AMD Still Stuck in the Dell

Last time we checked in with Advanced Micro Devices (NYSE: AMD  ) , the chip maker had laid out an interesting power-saving initiative called The Green Grid. Sun Microsystems (Nasdaq: SUNW  ) and IBM (NYSE: IBM  ) were also at the coming-out party. Now you can add a party crasher: Dell (Nasdaq: DELL  ) , which triggered speculation about a renewed flirtation with AMD after donning some green jeans of its own on Wednesday.

The thinking must be that Dell has suffered long enough without AMD's hot-selling Opteron processors for x86 servers. Maybe, but the numbers tell a different story. According to a press release from researcher IDC, Dell held steady at 9.6% in last year's Q4 study of server revenue market shares. And it held the No. 2 spot in terms of overall shipments.

Frankly, those numbers don't sound all that painful to me. So I asked Jim McGregor, a chip industry analyst with In-Stat, for perspective. His comments were unambiguous: "Not having Opteron in its product lineup has definitely put Dell at a disadvantage in terms of product selection, but what it lacks in product selection, it makes up for in manufacturing cost, which gives it more room to play on price and services. As a result, the impact on Dell has been negligible."

In other words, why are we even talking about this?

Maybe it's me, but I don't see any reason to let the speculative fires burn again till Dell reports a quarter in which it loses substantial server market share. That day may be coming, of course. (Certainly, AMD is putting enough pressure on Intel (Nasdaq: INTC  ) to make it possible.) But I'm willing to wait. If (when?) Dell loses ground, I'll be ready to write about how the long romance between Intel and Dell has gone sour. Until then, let's please just call this tech love story what it is -- a marriage that needs work.

Grab the salsa. A bowlful of chip-related Foolishness awaits:

Intel and Dell are both Motley Fool Inside Value selections. Get anall-access passto Inside Value to find out which other stocks are helping chief advisor Philip Durell beat the market by nearly 4%. You'll also receive instructive lessons on valuation and company analysis. Give Inside Value a try; it's free for 30 days.

Dell is also aMotley Fool Stock Advisorselection.

Fool contributorTim Beyerswonders when Dell will finally break down and tell Intel it has to date other people. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out which stocks he owns by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 513303, ~/Articles/ArticleHandler.aspx, 10/21/2016 1:19:15 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,112.72 -49.63 -0.27%
S&P 500 2,137.74 -3.60 -0.17%
NASD 5,251.22 9.39 0.18%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 1:03 PM
AMD $6.51 Down -0.46 -6.54%
Advanced Micro Dev… CAPS Rating: **
DELL.DL $0.00 Down +0.00 +0.00%
Dell CAPS Rating: *
IBM $149.94 Down -1.58 -1.04%
IBM CAPS Rating: ****
INTC $35.18 Down -0.26 -0.72%
Intel CAPS Rating: ****