Sometimes, we're in the right place at the right time, looking at the right info, and we still do the most boneheaded thing imaginable. Such is my feeling regarding the CPU world's secondary player, Advanced Micro Devices
Peeking at a chart like this, in conjunction with a quick read of the headlines, ought to serve as a reminder to pay closer attention to our watch lists. By failing to pay attention to the great potential in AMD's increasing market share, I missed out on a quick double. (The sound of a forehead smacking a keyboard? That's my colleague Bill Mann -- no stranger to this battle -- also wishing he'd acted on the obvious.)
Are we too late to join the party? According to computer trend-watchers at Gartner, AMD tripled its chip shipments over the same period last year, increasing its market share yet again at the expense of Intel. But to put the numbers in perspective, consider that Intel still commands nearly 95% of the market. From a shareholder perspective, Intel has other historical advantages over AMD as well, including much better margins in part because it has greater resources to invest in plant upgrades that lower production costs, such as 300mm fabrication facilities.
Unfortunately for it, Intel's expensive capacity expansion could turn into a liability, especially if AMD continues to poach its market. In fact, AMD is one of few chipmakers that's not having major inventory hair balls. It's always dangerous to paint with too wide a brush, but recent results at the likes ofCisco
At the present time, AMD looks like a standout in this crowd. Lower margins? Hey, maybe we should look at it as yet another opportunity for improvement. If this optimism happens to put me in agreement with the rest of the Street (horrors!), so be it.
For related Foolishness:
- Check out Intel's extreme makeover.
- Short Intel? Are you nuts?
- Tumble through the looking glass to peek at Intel's inventory.
Seth Jayson wishes he'd spent some of that Athlon budget on AMD stock, but at the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.