Advanced Micro Devices shares hustled up 5 13/16, or 14 percent, to a 52-week high of 47 5/16 Monday after rolling out the first 1 gigahertz microprocessor, a chip capable of executing 1 billion instructions a second.
AMD (NYSE: AMD) and chief rival Intel (Nasdaq: INTC) have been locked in a clock-speed battle since Aug. 8, when AMD announced its Athlon processor at 650MHz. The chip has since been able to consistently outpace Intel's Pentium III in what has become a race of clock-speed one-upmanship to the landmark 1GHz speed.
Analysts said the chips will not be available in big volumes after they are launched, and that only a handful of personal computer makers are likely to announce products designed for 1 gigahertz processors.
AMD said it would immediately begin shipping its chips to its two largest manufacturing partners, Compaq Computer Corp. (NYSE: CPQ) and Gateway Inc. (Nasdaq: GTW).
Intel shares fell 7/8 to 118 3/8 in midday trading.
Compaq said it will sell computers with AMD's 1 GHz chip with prices starting as low as $2,000 up to $3,300, with the typical price around $2,499. Gateway said its new boxes will begin pricing at $2,999.
AMD priced its 1 GHz processors at $1,299 in 1,000 unit quantities and said it plans to begin shipping the high-speed chips to all other computer makers in April.
Last quarter, AMD shocked Wall Street, when it beat the Street's fourth-quarter earnings estimate by 42 cents a share.
In the quarter, AMD raked in $65 million, or 43 cents a share, on sales of $969 million.
Fourteen of the 22 analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.
First Call consensus expects the Santa Clara, Calif. company to earn 42 cents a share in its first quarter and $2.13 a share in the fiscal year.