Dell Dumping AMD? (DELL, AMD, INTC)

The Wall Street Journal has reported that Dell Inc. (NASDAQ: DELL) has decided to stop offering processors from Advanced Micro Devices (NYSE: AMD) in most of its PC’s.  The computers offered on the Internet site will not have AMD processors, although the AMD processors will be available for orders that are taken over the phone or that are sold in stores.

When you consider how much of Dell’s past operation is actually web-sales, this has to be a blow for AMD and you have to wonder if that is going to make AMD be able to live up to its guidance.  Wall Street (and a673b.bigscoots-temp.com) is ready for Hector Ruiz or to leave his post.

We have heard numerous issues in having the dual option as it made Dell’s operations have one more supplier, one more option, and one different configuration.  The problems in many of the processors at AMD might not be helping matters either.  Frankly this really isn’t that much of a surprise after what we have heard.  What is a surprise is that Dell hasn’t just scrapped offering AMD chips in entirety. 

Intel (NASDAQ: INTC) just scored at least another partial victory.  AMD shares are down 4.4% at $6.30, and its 52-week trading range is $5.31 to $16.19.  Intel shares are only up 0.5% at $20.15 today.

Jon C. Ogg
February 8, 2008