TechWeek: AMD's Stock Catches Intel Flu

It took the market about 20 minutes on Friday to figure out that Intel's(INTC) midquarter warning was bad news for Advanced Micro Devices(AMD) as well.

AMD, which has been stealing market share for more than a year, opened at $41.33 -- 41 cents better than the previous close -- after Intel released the bad news, indicating that investors figured that the smaller company had tweaked the giant's nose yet again.

Don't believe it, says Dan Niles, CEO of Neuberger Berman Technology Management. "Our belief is that AMD is doing well, but not that well. This indicates the PC market has some issues," he says.

Judging by AMD's subsequent swoon -- it closed down $1.83, or 4.4%, to $39.50 -- plenty of investors saw it the same way.

Simply put, AMD couldn't possibly have gained enough share to force Intel to drop the midpoint of its guidance from $9.4 billion to $8.9 billion, says Niles, whose company has a position in AMD but not in Intel. "The math doesn't work, since Intel's share is nearly 80%," he says.

Shane Rau, a semiconductor analyst with IDC, notes that AMD gained more than a point of share at Intel's expense in the third quarter and may have gained as much as another point in the fourth quarter. "But this is more a statement about end demand than market-share direction," he said.

Right now, it looks like semiconductor makers not tied to PC sales are likely to remain in good shape, particularly those selling chips to handset makers. We'll get a much better reading when Texas Instruments(TXN) delivers its midquarter update on Monday.

Is Oracle a Google Wannabe?

When Oracle(ORCL) announced that it developed a new search technology this week, much of the financial and trade press immediately assumed that Larry Ellison and company were moving against Google(GOOG).

Not really.