The Chip That Must Save AMD
Advanced Micro Devices (AMD) stock stopped trading at $2.57 yesterday, down 13%. A year ago, that price was $13.27. So today's news -- that the company is about to release a new chip named Shanghai -- comes at a particularly crucial time.
The chip is supposed to be more energy-efficient and better at running "virtualization," a software trick that allows servers to do more work -- if their processors can keep up.
Customers who have tried Shanghai seem to like it. "We knew the performance results would be good, but they exceeded our expectations," HP exec Paul Gottsegen told the Wall Stret Journal. Dell (DELL) executives say they appreciate Shanghai's energy efficiency. Both companies will buy the chip. So will Sun (JAVA) and IBM (IBM).
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I know you're just going by what others have said, but AMD is not going to chase a sinking ship. Part of the reason why Intel is lowering their profits by a billion dollars is that they are chasing after Dell, HP, and Apple to keep AMD and VIA away from ever entering their boxes. You have to remember that AMD is trying to leave the chip making business and thrive more in the chip design business. If they make any chips it'll be for enterprises where there's more money to be made.
Also, when you figure the growth of netbook it allows you to see the losing proposition for chip manufacturers. The days are gone when people would pay $2,000 for a tricked out machine that could score 100 frames on the latest first person shooter. Now most people are content with being able to access the net and social games (ex. Wii).
AMD announced their new Quad-Core Opteron: http://www.amd.com/us-en/Corporate/VirtualPressRoom/0,,51_104_543_15434~129135,00.html
which isn't what people were looking for.