" 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
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
Much ado about Dell
And then there's Dell
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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