Dell has ordered between 1 million and 1.2 million desktop computers with Advanced Micro Devices processors and about 800,000 notebooks, Bank of America financial analyst Sumit Dhanda said in a report Thursday.
The new machines are likely to arrive late in the third quarter or early in the fourth, Dhanda said, citing sources in the manufacturing supply chain in Taiwan. That would mean Dell is awarding AMD 15 percent to 16 percent of its desktop business and 18 percent to 19 percent of its notebook business, he said.
Dell currently has announced plans only for a four-processor server using AMD's Opteron processor, but sources told CNET News.com that the computer maker is expected to announce a broader AMD partnership Thursday that includes more mainstream dual-processor servers as well as desktop and mobile computers.
Dhanda raised his estimates for AMD's financial performance because of the deal. His price target for AMD went from $19 to $23 per share, while his expectation for fourth-quarter revenue rose from $1.38 billion to $1.51 billion.
However, Dhanda believes AMD's profit margins are under pressure because of higher expenses, changes from the plan to acquire graphics chipmaker ATI Technologies, and Intel's new competitiveness.