Report: Analyst Upgrades AMD Despite Price War

Associated Press

The report quoted Merrill Lynch analyst Joe Osha as saying in the note that "The demand environment for PC components overall has been poor in the second quarter, which weighed on AMD's stock price." The note reportedly said AMD (Sunnyvale, Calif.) and Intel are expected to cut prices with the launch of Intel's Conroe desktop chip.

Osah reportedly added in the note, "We believe Intel had deliberately been squelching demand in Q2 by loudly and repeatedly discussing the July price cuts, which appears to have created a problem for AMD as well."

Earlier this month, Bruce Diesen, an analyst at Handelsbanken Capital Markets, warned Intel had initiated a price war with AMD as it chose to sacrifice profits on its current-generation microprocessors. The analyst noted both AMD and Intel were suffering from slow processor sales

In April, AMD warned of a flat second quarter due to seasonal slowness and some weak market spots.