There's a yin to every yang, a Frasier for each Muhammad Ali, and hopefully enough Seminoles to cover all the Gators. And so it is that microchip designer Advanced Micro Devices (NYSE:AMD) reports third-quarter earnings Thursday night, just behind larger arch-rival Intel (NASDAQ:INTC).

They do it this way every freakin' quarter. Intel won the last round. Is this the time to bet on an underdog?

What Fools say:
Here's how AMD's CAPS rating stacks up against some of its peers and competitors:

 

Market Cap (billions)

Trailing P/E Ratio

CAPS Rating

Intel

$91.9

16.0

****

Broadcom (NASDAQ:BRCM)

$7.9

26.3

***

NVIDIA (NASDAQ:NVDA)

$4.3

8.5

*****

Infineon Technologies (NYSE:IFX)

$2.5

N/A

**

AMD

$2.5

N/A

**

Data taken from Motley Fool CAPS on 10/13/2008.

CAPS all-star player mpapile doesn't like AMD's chances: "The whole market turned upsidedown when intel released core2, and now even hobbyists are not even using AMD. Some servers use AMD, but this is more rare now too. I dont see any market left for them at all."

onepremise disagrees: "They still provide cheap alternatives to Intel and are about to close the 65nm-45nm gap. [...] AMD is also changing their manufacturing process to make use of IBM's (NYSE:IBM) Immersion Lithography, which should be more cost effective."

Our players have yet to tell us what they think about AMD's new manufacturing strategy, molded in the image of Texas Instruments (NYSE:TXN). Would you mind weighing in on that issue, dear Fool?

What management does:
The gross margin trend shows some newfound pricing power without hurting revenue growth at all, and the trailing operating line is nearly back in black. That's good news for AMD investors, but it will take a bit more to push the stock out of penny-stock land again.

Margins

3/2007

6/2007

9/2007

12/2007

3/2008

6/2008

Gross

43.9%

38.6%

36.4%

37.6%

40.2%

44.0%

Operating

(4.3%)

(12.8%)

(18.1%)

(20.4%)

(15.9%)

(11.6%)

Net

(17.7%)

(29.8%)

(37.4%)

(56.2%)

(49.3%)

(58.2%)

FCF/Revenue

(25.3%)

(39.4%)

(37.4%)

(33.2%)

(27.7%)

(16.6%)

Growth (YOY)

3/2007

6/2007

9/2007

12/2007

3/2008

6/2008

Revenue

(8.5%)

(6.3%)

2.3%

6.4%

16.4%

15.1%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
After last year's debacle with delay upon delay of the Barcelona server-class processors, it's nice to see the winds of change blowing in Sunnyvale. The Shanghai architecture will be some 30% faster and more power-efficient than Barcelona, and that release date was just moved up from January 2009 to this very month.

In fact, I would not be surprised to see AMD rolling out Shanghai right alongside the earnings report. The Puma notebook platform stumbled at the finish line and failed to launch en masse by the back-to-school season. Score one for Intel, as the Montevina platform is easier to find in the wild. I'm thinking that the third quarter won't impress us much, in other words. Any distraction, like a major product launch, would be very welcome, then.

I might be wrong, and Shanghai could put the icing on an unexpected surprise cake. Asgard or Nifelheim. The poison or the antidote. The 'Noles win big or lose horribly. Just don't expect mediocrity from AMD, just as there are no tied games in college football.

You want a safe bet? Go across the street. This one's for us thrillseekers.