Wednesday, April 19, 2006

Alpha and Beta's bloody fight for supremacy

For the record:

Intel will report down, and will bring AMD with it.

Why? The money in Intel looks for a greedy monopoly, not a technology leader. AMD is a technology leader, looking to establish an ecosystem.

It doesn't matter whether it is a pack of wild dogs or entire nations, or companies: Whenever Beta is gaining strength and Alpha is weakening, it always happens that the supremacy has to be decided, and a bloody battle ensues.

One of the battlegrounds for companies are prices, thus the price wars. Another is the legal system. The market perception, etc.

This battle promises to be fought on all terrains: Servers, Mobiles, Desktops, Finances, Media; because the challenger is strengthening in all terrains.

Fortunately, AMD's management has been avoiding the conflict and at the same time preparing for it. I always felt fine about their appallingly modest goals, but at the same time they demonstrate not being afraid of the conflic, if necessary.

There are two more things:

How is it possible that Intel is down in a strong market (weak market is bullshit according to my appreciations): Because they had to resort to aggressive pricing to clear their channel, and the problem is far from over because according to my calculations, AMD took 1.5% market share in Q1.

Intel will do their book manipulations and media spins to make it appear that they are close to $0.20 EPS, so expect a murky conference call meeting.

Won't Intel going down infuse enthusiasm for AMD? After all every Intel problem is due to AMD's successes: No, because observers will want to wait until the battle is nearly over, not now, when it is just about to begin.

But still, the market capitalization relationship is very wide, if Intel goes down 1% and all that money goes to AMD, AMD should jump 8%, there would be substantial migration of that sort that will mitigate the previously described dynamics.

And a possible strong bottom is the 200 days EMA ($28+) because at that level the T.A.s will start to cover/load, the long term investors will keep asking: But this company can still sell processors no matter what Intel does, some earnings will come here, it can win the war, etc., etc., providing hard support.


Anonymous said...

For the record, the blogger posted at 3pm, Central time. That is one hour before Intel's anouncement. Intel posted right in the middle of the (revised) earnings. The shares of intel went up and, anfter a downward spike for a few moments in the morning, AMD is trading at previous levels....

Draw your own conclusions people....

Eddie said...

Thank you for the attention to the exact time I posted. That was literally minutes before the results were made public, and Intel beat the estimations.

But, just like I said, there were murky businesses, and Intel is today down, lost everything it went up after earnings and more.