AMD Hits New 52-Week Low, Private-Equity Rumors Heard

December 5, 2007 12:51 PM EST

Analysts at Thomas Wiesel made comments about Intel (Nasdaq: INTC) today, upgrading the stock from Market Weight to Overweight. The firm said it anticipates better-than-expected PC demand in 2008 as emerging markets will need to rapidly start buying computers.

Such news should be very promising for the semiconductor industry as a whole. NVIDIA Corp. (Nasdaq: NVDA) is up more than 6% and Marvell Technology Group (Nasdaq: MRVL) has risen about 4%.

Intel\'s top competitor, Advanced Micro Devices (NYSE: AMD), however, is not faring so well. By 11 am, shares of AMD had fallen more than 3% to a new 52-week low at $8.96, a level AMD\'s stock price hasn\'t seen since 2003.

AMD has had a rough 2007, down by more than 50% year-to-date. As AMD has battled with Intel in a price war this year, the Company\'s fundamentals have deteriorated as margins began shrinking. Wealthy investors in Abu Dhabi attempted to halt this slide, buying about $622 million worth of AMD stock, or an 8.1% stake in the Company. On the other hand, Wall Street didn\'t necessarily agree with the investment and AMD\'s stock price has went on an even more drastic decline since then. If a major investment from the Middle East couldn\'t help AMD stock, what, if anything, can help the Company?

The answer appears to be presenting itself mid-way through the trading day: private-equity.

Just after hitting the new 52-week low today, AMD shares promptly bounced as rumors were heard around Wall Street about a possible private-equity bid for the Company. Although the talks are strictly rumors, and private-equity buyouts are not always necessarily good for investors, fans loyal to AMD\'s story are looking for any sign of hope.

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