Moreover, AMD still faces its traditional problem in the x86 market: Intel has far more resources at its disposal to build better products more profitably. Intel spent more than $2.5 billion on research and development last quarter, whereas AMD cut back to just $312 million. Even NVIDIA seems to be on pace to overtake AMD in R&D spending this year. I am skeptical that AMD can be so efficient with its R&D spending that it will be able to keep up with its deep-pocketed rivals. In the technology world, falling behind can quickly become fatal.
From a high-level perspective, AMD’s “better-than-expected” results were still pretty bad. Advanced Micro Devices, Inc. (NYSE:AMD) needs a lot of good things to happen to become sustainably profitable. Windows 8 needs to become successful, game console sales need to rebound, and the company needs to keep up with Intel and NVIDIA despite a slim R&D budget. It’s not impossible, but I’m still not willing to bet any money on an AMD turnaround.
The article AMD Results: Better Than Expected Is Still Pretty Bad originally appeared on Fool.com.
Fool contributor Adam Levine-Weinberg owns shares of NVIDIA. The Motley Fool recommends Intel and NVIDIA. The Motley Fool owns shares of Intel and Microsoft.
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