MarketWatch First Take
Intel and AMD show diverging outlook7/9/12 7:04 PM ET (MarketWatch)
SAN FRANCISCO (MarketWatch) -- Investors got a timely look at the stark contrasts in the semiconductor on Monday afternoon, with one company throwing around more than $4 billion to jump start the next wave of technological advances, and the other struggling to grow its business.
You guessed it: both
Minutes later, AMD (AMD) sprung its own -- and considerably less chipper -- surprise. Just a week before its second quarter earnings were due, the struggling chip maker said revenue would be weaker than expected, due to "softer-than-expected channel sales in China and Europe, as well as a weaker consumer buying environment impacting the company's business." Read more about AMD news.
(ASML) The back-to-back diverging news showed the stark contrast between the two rivals, even amid some big shifts in the broader chip business. Intel has in the past invested its way out of downturns, and it demonstrated its continued heft with big plans in the future, even while coping with a softer PC market.
AMD is having a tougher time, and not as able to grapple with price cuts in the PC business, which has been beset by competition from
"While the macro environment and PC data points are largely to blame, we also suspect that AMD ceded slight share to Intel due to competitive pricing," said Doug Freedman, an analyst with RBC Capital Markets, in a quick note to clients after the bell.
AMD may or may not be able to boost its results with the expected launch of Windows 8 later this year. And while Intel says it is hoping other chip firms join in its investment, the company's growing dominance is more likely to leave it the only one at the table who can pick up the check.