AMD to Tell Us Where It Hurts

The outcome of the fourth quarter is not exactly a secret.

Advanced Micro Devices(AMD Quote) bled, while Intel(INTC Quote) fared better than expected.

When AMD reports its earnings after Tuesday's market close, investors will get all the gory details, including a more complete accounting of the severity of the price erosion, as well as the latest market share moves in the continuing slugfest between the two chipmakers.

"The worst of the news is out [for AMD]. And hopefully the details will help us get a clear picture of the depth of their problems for Q4 and their prospects over the next six months," says FTN Midwest analyst JoAnne Feeney.

While AMD acknowledged in its warning earlier this month that its chip prices and its profitability took a thrashing in the fourth quarter, the company also said that unit shipments were up during the quarter.

"What we're looking for is detailed information on unit sales in desktops and notebooks so that we might glean a better picture over the market share shift in Q4," says Feeney, who rates AMD a buy.

Like many analysts, Feeney believes that AMD lost market share in servers in the fourth quarter, as Intel's new generation of Xeon processors continues to win fans in the market.

Indeed, Intel's server momentum continued on Monday, when it announced that Sun Microsystems(SUNW Quote) will use the Xeon in certain servers, supplementing its existing lineup of AMD-based machines.