- Bank of America notes their channel checks indicate that AMD (NYSE:AMD) is preparing for another round of price cuts on Apr 9th, in an effort to 1) bolster flagging demand for its products and 2) preempt Intel's price cuts scheduled for Apr 22nd. These price cuts, which the firm believes will be across of several AMD's desktop products (including Semprons, Athlon X2s), and will range between 26-42%.
BAC is reducing their below consensus FY07 GAAP EPS from a loss of $0.45 to a loss of $1.00 (consensus a loss of $0.39) saying AMD's elevated cost structure, attributable in part to a significant depreciation ramp through 2007, will make it even harder for AMD to avoid more pressure on GMs, despite the slight relief accruing from increased 65nm volumes.
They expect the aforementioned cuts to have little impact on Intel. Succinctly put, while the price cuts will put some pressure on Intel's low-end offerings, they expect blended pricing for Intel's desktop processors to trend flat with higher volumes in the premium Core 2 Duo segment offsetting price erosion in lower end processors; the stability in notebook and server pricing (no price cuts) should serve as anadditional mitigating factor.
Maintains Neutral on AMD but thinks it's premature to bottom-fish on the stock.
Notablecalls: Ouch!
BAC is reducing their below consensus FY07 GAAP EPS from a loss of $0.45 to a loss of $1.00 (consensus a loss of $0.39) saying AMD's elevated cost structure, attributable in part to a significant depreciation ramp through 2007, will make it even harder for AMD to avoid more pressure on GMs, despite the slight relief accruing from increased 65nm volumes.
They expect the aforementioned cuts to have little impact on Intel. Succinctly put, while the price cuts will put some pressure on Intel's low-end offerings, they expect blended pricing for Intel's desktop processors to trend flat with higher volumes in the premium Core 2 Duo segment offsetting price erosion in lower end processors; the stability in notebook and server pricing (no price cuts) should serve as anadditional mitigating factor.
Maintains Neutral on AMD but thinks it's premature to bottom-fish on the stock.
Notablecalls: Ouch!
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