Advanced Micro Devices, Inc. (AMD)

Talmar (55.34) Submitted: 9/28/06 5:59 PM : Start Price: $27.09 AMD Score: -76.28

Little can be said for this company by people who don't know the computer industry with some intimacy. Intel is certainly top dog in processors, but it seeks to secure its position by offering the same thing over and over with speed tweaks and tacked-on features. Its advantage is stability, proven reliability, and a trusted brand name. Its disadvantage is innovation.

Until recently, Intel artificially boosted its clock speeds to make its processors "appear" faster than AMD or PowerPC processors. Which would you rather have, a 2GHz AMD processor or a 3.2GHz Intel processor? Would you have guessed they are essentially equivalent? Artificially boosting the clock speed also caused efficiency problems. An Intel processor would consume more power and create more heat than its AMD equivalent. All of this controversy has put some bad blood between computer enthusiasts and Intel.

AMD, on the other hand, has taken a chunk out of Intel's share in the market by offering new technology that runs cooler, cleaner, and more efficiently. Let's not forget that AMD created the first 64-bit PC processor, or the first dual-core processor. And even today, while Intel is trying to go "quad-core" by layering two dies on top of each other (with as much power and heat as the Extreme Edition--which isn't saying much), AMD is working on a single-die, four-core processor that will operate with the same power consumption and heat emission as their current dual-core processors.

In fact, you really don't need to look any farther than the press releases by each of these companies that were released mere days ago. While AMD is developing a new architecture that is more modular and therefore more flexible--allowing for additional co-processors by (gasp!) other vendors to run alongside an AMD core--Intel has made known their intentions to build processors that are more efficient for certain tasks, essentially binding a processor to a limited set of improved functionality. What if I need optimized search operations? I'll have to get the optimized-search processor from Intel. But what if I find later that I also need to speed up complex mathematical operations? Then I'll have to ditch that core and buy the optimized-search-and-math processor. What if I need to improve operations that aren't supported by an Intel processor? Then I'll have to switch to AMD who, because of their modular system, supports the improved operations with a coprocessor from IBM, Samsung, or one of several other processor manufacturers.

Over the next few months, AMD investors are going to get scared. At this very moment AMD stock is sinking because of the Intel conference. AMD stock will also sink with its acquisition of ATI. But don't start running scared like the rest. Take this time to buy up all you can, because AMD isn't finished yet. They're going to be leading us into the next generation of computer processing, just like they led us into this one.

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