Why Intel, and why now?

Though we could argue incessantly about which company has the better technology, AMD (AMD:NYSE - news - commentary - research - analysis) or Intel, the fact is that Intel has the marketing muscle and deep pockets to survive the industrywide downturn. With more than $9.1 billion in cash and short-term investments, ample operating cash flow and relatively minimal debt, Intel is in pretty good shape.

Of course, the naysayers will argue that pricing and margin pressures have soured Intel's earnings potential, and that for this reason investors should avoid the stock. But I would argue that in response to a decline in prices and capacity utilization, management has sought to trim other expenses such as R&D and capital expenditures in an effort to boost net margins. And the fact is, these efforts have and will continue to have a positive effect on earnings per share.

The company also has spent a great deal of time and effort on reducing its share count through a share repurchase program. In fact, during the third quarter alone, Intel bought back 34.9 million shares at a cost of roughly $1 billion. And since the repurchasing program's inception in 1990, the company has bought back more than 1.5 billion shares at a cost of $25 billion.

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Do you think in all honesty that if AMD had a chance of knocking Intel off its throne, Intel's board would continue to support a share repurchase program? Of course it wouldn't -- the board would take the cash and plunge it back into R&D, or into marketing to win back market share. My point is that this is yet one more sign that the company is and will remain the 800-pound gorilla of the industry for the foreseeable future.

So is there risk?

Absolutely. The near-term outlook for PCs and other electronic gadgetry that utilize Intel's chips is lackluster at best. But remember, chips trade in boom and bust cycles, meaning investors either love 'em or hate 'em. And right now they hate 'em. But American business and technology are dependent upon Intel's products. And over time, if you believe that dependency on semiconductors will increase, then Intel is your best bet.

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Who won today's Face-Off? Glenn Curtis Arne Alsin See Results