AMD was a good buy until they acquired ATI. The debt load of the newly merged company is like an ant trying to carry an elephant. Second, they are trying to keep market share by basically giving away their processors. The sacrifice is not worth the results. Until they release a revolutionary processor that can outperform core2duo, with low power consumption; I wouldn't touch that stock with a 10 foot pole at any price. Plus there's not much of a short ratio, so no one to squeeze except maybe the longs all the way down.
Very good points. It is amazing how much sentiment can shift in the PC industry. A year or so ago AMD produced the desktop CPUs to buy (Athlon 64 X2s), now the Core Duo variants are generally mopping the floor with them. My suggestion to any would-be buyers of AMD shares would be to read a number of the tech news/rumours websites out there, you would then know about any significant new products months before they become financially significant for the company. Current batch of rumours is that further price cuts are nearing for AMD CPUs.
Yah, AMD is taking a beating, and it's a huge drag on my portfolio in all honesty. But given that the portfolio it's dragging is 100% free money, I can afford to not care and wait it out. For that reason, I try NOT to give stock ADVICE, because at any given time, I could be talking about a stock and not be in it myself. Some days I am in and out of a stock on my list very fast. Others, I will sit on for years. AMD and CISCO happen to be the 2 exceptions to that, I'll sit on them for decades... for different reasons. I'm a woman, I get sentimentally attached to some stocks . That doesn't mean that I don't make armloads of money in other stocks I'm not attached to, because I do. I AM a bit taken aback by AMD tanking, but you know, I held it as it fell from $70, it's down to the last $13 so how much more pain? I KNOW it's not going under however, even if it will take some time to assimilate ATI. These last few months of gains have so totally covered for AMD's fall from $40, I haven't even noticed it, my portfolio is still going UP. I generally sell calls against my AMD on it's way down, so it's not like I'm losing much anyway. I have to say that lately, AMD has been managed pretty poorly, and I am less trustful of management, who painted a very deceptively glowing picture the last time he opened his yapper. It's becoming clear that he did that only so he could insert both feet. Supposedly they have a duo killer in the pipes, but that rumor is getting a bit stale now ... they'd better, or they really are in trouble. In my own case, well, I am going to wait and see either way.