There's no denying Intel's (NASDAQ:INTC) market stature. Twenty-one years ago, the chipmaking giant designed the original 80386 processor that launched personal computers into our everyday lives, with a little help from Microsoft (NASDAQ:MSFT) and IBM (NYSE:IBM). Chipzilla has done a fine job of keeping that market largely to itself ever since.

But this dominance is by no means guaranteed, as shown by the spirited charge from underdog Advanced Micro Devices (NYSE:AMD) over the past half a decade. AMD has proved that a smaller company with fewer resources and patents to its name can indeed come up with a competitive -- or even superior -- x86 chip design these days.

Therein lies my beef with Intel. For all the recent hoopla about price wars and restructuring, I get the impression that the company is mostly content to rest on its laurels. Does that seem a bit harsh? Lemme explain what I mean.

Sure, Intel is still releasing new products -- Monday morning, for example, the company announced a handful of new desktop processors and the first of a new line of Core 2 Extreme mobile chips. It's not standing still on the platform side either, as the Core 2 architecture is a completely different beast than the first Core, or the Pentium 4 line before that. And of course, this is the frontrunner in process technology, ready to roll out next-generation 45nm chips months ahead of IBM and AMD.

But Intel is running to stand still, to borrow a line from U2. In many ways, Core processors are a throwback to the days of Pentium 3. In the last quarter, Intel reduced its R&D budget by 11.4% from the year before, at a time when supposedly duressed AMD added 63% to its research budget. One step up and two steps back, to borrow a line from Bruce Springsteen. Intel is setting itself up for a big fall if AMD can pull through this downturn in decent shape. The fundamental commitment to technical leadership just isn't there anymore, which leaves it open to a blindside hit down the line.

And despite being a Motley Fool Inside Value pick, Intel's stock doesn't look like much of a deal today, trading at over 100 times free cash flow and 35 times earnings -- levels not seen since the end of the tech bubble days in 2002. I think that bargain is long gone, and it's time to cast a wary eye on the chip king. It has stumbled before and fallen hard, and looks set to do it all over again.

Wait! You're not done with this Duel. Go back and read the other arguments, then vote for a winner.

Intel and Microsoft are Motley Fool Inside Value picks.

Fool contributor Anders Bylund is an AMD shareholder but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure will always keep you on your toes.