It looks like Intel (NASDAQ:INTC) is making the right moves in its cost-cutting program. The proof is in the custard: Modest revenue growth turned into an impressive 44% net gain, despite an oppressive gross-margin trend.

As an AMD (NYSE:AMD) shareholder, this irks me a bit. I've been expecting Intel to put a couple of feet wrong in this danse macabre, as it has in past turns. But Paul Otellini and his backup dancers have managed so far to push out impressive new products and process improvements, while continuing an aggressive and costly price war. All of this while cutting its employee base by some 12%, or 12,000 employees. And all in one year's time, and it didn't hurt earnings one bit. It's a veritable West Coast Swing extravaganza of ruthless efficiency.

So my hat's off to these cavaliers. It's not enough to make me drop my stake in AMD, because I think the real test will come this fall with both Intel's Penryn and AMD's Barcelona parts on the market, head to head. Then there's next year, when AMD's ATI acquisition is supposed to bear its real fruit with the upcoming Fusion CPU/GPU and an entirely new motherboard architecture.

Either partner could stumble in this intricate move sequence, of course. AMD could fail to make a dent with Barcelona, or to get platform partners for its truly new products. Intel could trip its rival up, or simply outdance it in operational efficiency. On the flip side, the Barcelona and Fusion launches could live up to their hype, and AMD's long, lean years as the underdog could pay off and let the smaller dancer outlast its partner. And, there's that anticompetitive-practices lawsuit to consider, so the judges have their say, too.

All in all, the winsome twosome is basically warming up for that main event right now. We'll see how AMD's stretching exercises are working out in a few days, and then we'll repeat the whole warm-up show next quarter. After that, it's really showtime. I hear America's favorite dancer lives just a few hours away from both headquarters, and he's a swing specialist. Private lessons, anyone?

Dance the night away, Fool:

Intel is a Motley Fool Inside Value pick.

Fool contributor Anders Bylund holds no position in any of the companies discussed here, exept AMD. You can check out Anders' holdings if you like, and Foolish disclosure will make your day, every day.