AMD Shares Slammed as Dell Takes down Computers
Dell said on Friday that it cut a majority of computers from its website which feature processors from Advanced Micro Devices, adding to the woes of chipmaker's ailing stock.
Shares of AMD fell 25 cents, or 3.79 percent on the news. Dell said the shift, which took place over the past week, only affects consumer computers available on its Web site and could change.
Although this statement was fairly quickly removed, analyst Cody Acree at Stifel Nicolaus said that, [Wall] Street speculation rapidly grew to the point that the relationship between AMD and Dell has been questioned.
The computer maker will continue to sell AMD-based consumer PCs over the phone and through retailers, however. Dell last year moved aggressively into retail stores, such as Best Buy, Staples, and Wal-Mart. The company's PCs can be bought today in more than 10,000 stores worldwide.
Dell spokesman David Frink said the shift was just a regular adjustment to how we provide our products to customers. Declining to provide details on the motivation behind the adjustment, Frink said, We're committed to AMD's product line as a long-term partner of ours, in order to provide continued choice to all our customers.
AMD has been under increase pressure from rival Intel, who's new line of dual-core chips are used in the majority of notebooks and desktops worldwide. Dell maintained a strictly Intel-based PC lineup for years, and only began offering AMD chips in mid-2006.
But in 2007 AMD stumbled, missing expected shipment dates of a key microprocessor code-named Barcelona as Intel regained its footing after missteps of its own in 2005 and 2006.
The firm has lost more than 20 percent of its market value since last Friday and is on track to reach its lowest levels since mid January.
Meanwhile, Intel shares rose more than 22 cents late Friday, gaining 1.1 percent to $20.27.
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