INDUSTRY

Analyst Mark Lipacis of Prudential cut his rating on Intel and estimates its target at $15. His reasoning is that Intel will lose more market share to bitter rival AMD. Intel closed at $19.62 yesterday, while AMD closed at $34.15. In a research note published, the analyst mentions that further market share losses for Intel, relative to AMD, are expected to reduce the former company's 2006 gross margins by 350bps. According to the analyst, start-up costs may lead to additional gross margin erosion of 275bps during December 2005-December 2006. The GAAP EPS estimates for 2006 and 2007 have been reduced from $0.92 to $0.86 and from $1.04 to $0.99, respectively.