With less money coming into the company, AMD will retrench. As part of the austerity campaign, AMD will fill only "critical" job openings and shave $500 million from this year's capital expenditures budget -- a 20 per cent reduction.

"I keep waiting for one of these companies to cry, 'Uncle!' " [Doug Freedman] said. "Until that happens, it's hard to recommend these stocks."

Investors seemed encouraged by AMD's cost-cutting commitment as AMD shares climbed 49 cents, or 3.8 per cent, to close Monday at $13.35 on the New York Stock Exchange. AMD's stock price has plummeted by about 60 per cent during the past year, a $9 billion drop in market value that has underscored concerns about the company's ability to withstand Intel's pricing pressure.