Intel reaps fallout from Dell announcement

— 4:59 PM on May 19, 2006

Following the announcement yesterday of Dell's plans to start offering AMD-based servers, Intel's stock has plummeted to a three-year low. The stock was selling at a high of $18.85 yesterday but sunk to $17.94 this morning after the Dell announcement, a value not seen since April 2003. Meanwhile, AMD's stock climbed to a high of $33.95 today, up a cool $2.55 from yesterday's high of $31.40. AMD's highest share price in five and a half years was on January 31, when the company's stock was up to $42.10.

In a note to investors, an analyst for Merill Lynch claimed the Dell partnership could boost AMD's server market share to 26% by the end of the year, compared to 22.1% last quarter and 7.4% a year before. The analyst added that growth should continue next year, at which point AMD may hit a 30% server market share.

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