Jan 21, 2009

Foolish Forecast: AMD Is Stronger Than It Looks

Semiconductor underdog Advanced Micro Devices (NYSE: AMD) will report fourth-quarter earnings on Thursday night. The last few quarters have been disastrous, and AMD's share price has shrunk to microscopic levels. Is this where the proverbial rubber hits the road, or will long-suffering investors continue to suffer? Let's have a little chat about all of that.

What Fools say
Here's how AMD's CAPS rating stacks up against some of its peers and competitors:

Company Market Cap (billions) Trailing P/E Ratio CAPS Rating
Intel (Nasdaq: INTC) $73.42 14.3 ****
Texas Instruments (NYSE: TXN) $19.2 7.8 ****
NVIDIA (Nasdaq: NVDA) $4.0 11.9 ****
Sun Microsystems (Nasdaq: JAVA) $2.73 N/A **
AMD $1.26 N/A **

Data taken from Motley Fool CAPS on 01/20/2009. Financial data courtesy of Yahoo! Finance.

CAPS member skymutt2 wrote the following in bearish volley in early December: "Burning thru cash, loads of debt, no end in sight for the losses." Ouch.

"This is a big one for a come back," says all-star member Vet67to82, who has an "outperform" rating on AMD. "Intel's only competition ... AND saving Intel from regulatory heat as a monopoly. Intel needs AMD to survive and prosper. ... Less price competition will be good for both companies bottom lines. Sooo, I'm looking for AMD to go from $2.00 to $10 to $20." (Story Link)

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