This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

AMD Falls After Announcing Processor Delay

Chris Lao, Kapitall: AMD has pushed back the release of its Kabini processor, but does that justify a slump in stock price?

Advanced Micro Devices ( AMD ) could delay the launch of a budget processor for PCs. DigiTimes and TechSpot reported that AMD pushed back the release date of Kabini-based Accelerated Processing Units (APU). The news contributed to a recent slide in AMD shares. With AMD now down 10.5% in a month, it might be a good time to assess the company’s prospects in the near future.

Possible delay

The Kabini architecture targets budget computers, and is an important source of income for AMD. Built on a mere 28 nanometers, the processor is quad-core, and consumes just 25W. If AMD does delay the launch, it will benefit Intel (INTC). Lately, Intel’s shares are not doing well either. Despite paying a dividend yielding 4.04%, with consistently strong profit margins every quarter, Intel still expects sales to grow modestly.

[Read more from Kapitall: Whats Next For Bill Ackman]

AMD is underperforming Intel in the near-term as shown in the chart below, but is still up 42.5% in 2013 compared to 11.4% for Intel. Optimism is high that AMD will benefit from sales of system on chip (SoC) integrated circuits in gaming consoles.

Click on the interactive charts below to see data over time. 

Delay insignificant

The chip delay is not very significant, since only a matter of a few extra months. In the interim, investors can look forward to new graphics card releases and revenue from SoCs. What will matter for AMD is product pricing. If the company can price the budget chip aggressively, it can grow its market share in the PC sector.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs