" In one fell checkbook signature, the company gained a solid chipset solution [from ATI] that gives AMD an equivalent to Intel's Centrino concept and guarantees system builders a solid road map going forward. It may be the best $5.4 billion the company ever spent ."

-- Anders Bylund, five minutes ago

No doubt ATI is a good company, but rival Nvidia (NASDAQ:NVDA) is no slouch, either. And now there are rumors that Intel (NASDAQ:INTC) is interested in a buyout. So much for spending $5.4 billion to gain a competitive advantage, eh?

Seriously, what does ATI have that Nvidia doesn't? Both are specialists in chipsets for graphically intensive platforms such as gaming consoles. ATI has the Xbox 360; Nvidia will have the Sony (NYSE:SNE) PS3. Ho-freaking-hum.

Much ado about Dell
And then there's Dell (NASDAQ:DELL), where the story isn't so swell. Think business isn't really so bad? Well, I've got news for you, bucko: Gross margin dropped by 2% from May to August alone.

Dell will make up the top-line shortfall somewhere. How much do you want to bet suppliers will be the one to take a hit? Expect starry-eyed AMD, which simply couldn't wait to announce a partnership with Mike and Kevin's not-so-excellent PC adventure, to be near the top of the hit list.

Great chips, no salsa
Look, I still believe that AMD is a strong and innovative company. This isn't the same also-ran that once made Jerry Sanders look like the Silicon Valley equivalent of Bozo the Clown. Instead, it has top-notch leadership in CEO Hector Ruiz and cutting-edge technology in Opteron.

But that's only half the story. Equally important is AMD's history of cash flow losses and a price war that's killing semiconductor prices and hurting revenue growth. Someday, investors will account for these risks. And when they do, they'll discount the stock accordingly.

So, like I said at the outset of this debate, I wouldn't touch this stock with your money. Or Anders'.

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Fool contributor Tim Beyers owns LEAP options in Apple, which he's rated to outperform the S&P 500 in Motley Fool CAPS. What's your take?Get in the gamenow.

For more about Tim's portfolio, check his Fool profile . The Motley Fool's disclosure policy is almost as good as a bowl of warm chips and freshly made, cold salsa.