AMD shares fall to low on market share losses

Sunnyvale, Calif.-based AMD has been hurt by product delays and the company's deepening financial woes, factors that have allowed Intel to increase its lead in the market for microprocessors, the core business for both companies. Microprocessors are the brains of personal computers and servers.

To help turn the company around, last week AMD replaced CEO Hector Ruiz with Chief Operating Officer Dirk Meyer. The company also reported its seventh quarterly loss in a row, for a total of $5.5 billion in losses since the last three months of 2006.

Continuing a long slide, AMD's stock price fell another 18 cents, or 3.9 percent, to close at $4.41 Tuesday after Lehman Brothers analyst Tim Luke published a research note showing that Intel gained more market share at AMD's expense in the second quarter. The stock had been up above $40 per share in 2006. At one point Tuesday the stock hit $4.32, its lowest point since October 2002.

The note was based on data released after the market closed Monday from Mercury Research, a respected Cave Creek, Ariz.-based firm that tracks semiconductor market share. The data is sold to investment firms and other industry clients before it's released to the public, so the details about semiconductor market share generally emerge first from financial analyst notes or the companies themselves.

Santa Clara, Calif.-based Intel, the world's largest semiconductor company, boosted its total market share from 79.2 percent in the first quarter to 80.5 percent in the second quarter, with AMD essentially owning the rest of the market, according to the Mercury Research findings.

Luke said part of Intel's strength during the quarter can be traced to the company's momentum with Macintosh maker Apple Inc., whose products command premium prices, and strong sales with Dell Inc. for lower-priced computers.

Lehman Brothers maintained its overweight rating on Intel, a sign the firm is bullish about the company's prospects, while leaving unchanged its equal weight rating on AMD, which shows the firm is cautious about AMD as an investment.

Intel shares were unchanged at $22.09.