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Intel's Atom Bombs, AMD Picks Up the Pieces

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I've said it before, and I'll say it again: Advanced Micro Devices (NYSE: AMD  ) ain't going away.

In fact, independent market research company IDC says that the underdog is gaining market share on archrival Intel (Nasdaq: INTC  ) . While Intel has launched one strong product after another lately, and AMD seems to be trailing in many respects, consumers and corporate buyers still see value in AMDs products.

Intel lost 4.7 percentage points of total processor market share to land at 77.3% in the first quarter, according to IDC's report. AMD picked up 4.6 points to a 22.3% share, and far-behind low-power specialist VIA snagged the remaining 0.4% of the market.

Much of the market shift came from Intel's netbook-level Atom chips, whose sales dropped 33% from the previous quarter. Sophomore slumps sure happen fast in the semiconductor space. Hewlett-Packard (NYSE: HPQ  ) and Dell (Nasdaq: DELL  ) have been selling netbooks for over a little over half a year now, and Apple (Nasdaq: AAPL  ) still hasn't entered that cost-conscious market.

So the Atom phenom couldn't hold on to its early gains. But the larger lesson to learn here is that AMD remains a strong competitor even while Intel is executing very well. In years past, AMD's success often depended on Intel making mistakes like delaying a critical processor upgrade. That's no longer the case.

My mainstay AMD holdings are still worth about half of what I paid for them a couple of years ago -- but the additional batch I picked up last December has doubled in value. On average, I feel pretty good -- one foot in the freezer and one in the oven -- and the battle will rage on for years to come with plenty of share gains still ahead. Count on it.

Further Foolishness:

Apple is a Motley Fool Stock Advisor recommendations. Dell and Intel are Motley Fool Inside Value recommendations. The Fool owns shares and covered calls of Intel. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in AMD, but he holds no other position in any of the companies discussed here. The "one foot in the freezer" thing is a metaphor -- Anders isn't all that limber. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.

Read/Post Comments (2) | Recommend This Article (8)

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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.

  • Report this Comment On May 12, 2009, at 3:29 PM, Wigglyworm1 wrote:

    What a stupid article. I can't believe I spent the time to read it. It says nothing of interest and is only cheerleading for AMD who is in a real financial hard spot.

  • Report this Comment On May 13, 2009, at 9:57 AM, Fearles wrote:

    Agreed. Sensationalist reporting. Nice title. You really supported how they are "bombing". One report shows some upside for AMD and you write an article to cheerlead for a stock you own to try to make back some of your catastrophic losses. I expect more from this site. Intel, known for conservative guidance, stated they expect better than expected Q2 and that they definitely hit bottom and are in recovery. AMD, known for misleading and overzealous guidance, couldn't say they've even started a recovery and expects flat growth in Q2. Intel is still making money and AMD is bleeding. What responsible columnist would recommend AMD now? Maybe GM also? They could have a major turn around in their future... really disappointing article and title. Sorry I read it.

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