A Mistaken Upgrade Of AMD (AMD)

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By Douglas A. McIntyre Published
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According to AP: Stifel Nicolaus analyst Cody Acree upgraded the stock to a short-term "Buy" from "Neutral," and set a $17 price target on it. The reasons to justify the change of heart are thin. The research firm believes that AMD (AMD) may have gained a percentage point or two in market share from Intel (INTC).

But, at what cost? AMD’s gross margins are already razor thin. As customers weight for the company’s new chips, heavy discounting may have accounted for any improved sales. As ZDNet wrote recently: The company was already in the process of aggressively discounting its processors when it was forced into even steeper discounts when one of its customers, believed to be Dell, left it stranded with a bunch of unsold chips.

And, ongoing rumors that AMD may outsource its manufacturing have Wall St. concerned that the company will lose much of its flexibility in terms of changing over production to popular chips rapidly.

AMD is still in trouble, upgrade or no.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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