Will Intel Corporation (INTC)’s New Gen Processor Widen Leads?

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AMD takes a backseat to Intel

Advanced Micro Devices, Inc. (NYSE:AMD) tried to match Intel’s technology in the microprocessor space by launching its second-generation A-series processors, which boasted of faster graphics generation, improved power management and extended battery life. But it could not salvage the firm from financial setback as it reported a 17 percent drop in its 2012 revenue.

AMD management miscalculated the mood of the market and over-concentrated on the manufacturing of microprocessors and semiconductors for personal computers; the move proved disastrous since the market was going through a transition phase where PC markets were constantly losing sheen and creating space for tablets and smartphones.

Recently, AMD disclosed its plans to hire experienced engineers to contrive low-power microprocessors like Intel’s Clover Trail + chips. It is yet to be seen if AMD’s strategy will suffice for the revival of its semiconductor and microprocessor manufacturing unit to pose a threat to Intel’s dominance in this domain. But overall, keeping in view AMD’s average annual sales figure of $6.5 billion and its over-cautious approach in pursuing other segments different than the desktop space, it appears that this relatively small competitor is still way behind Intel Corporation (NASDAQ:INTC).

From its average $6.5 billion annual sales, the figure for 2012 plummeted to only $1.2 billion, with losses of $102 million or 14 cents per share. Apart from its gross margin figure, which fell sharply from 45.7 percent to 15.4 percent, its overall revenue in the personal computer space also declined by 37 percent.

Intel is a Buy

With strong fundamentals and good investor sentiments added to the company’s low stock price and imminent buyback program, Intel Corporation (NASDAQ:INTC) is undoubtedly a buy in any case, whereas AMD still has a long way to travel before winning investors’ confidence.

The article Will Intel’s New Gen Processor Widen Leads? originally appeared on Fool.com and is written by Jeremiah Feliciano.

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