Applied Micro (NASDAQ:AMCC) currently exhibits deteriorating fundamentals, a history of significant shareholder value destruction, and management that has managed to convince the investment community (and in particular the sell-side equity analysts) that its upcoming ARM (NASDAQ:ARMH) compatible server product called "X-Gene" will bring about a dramatic reversal of fortunes for the company, which is currently in the process of burning significant amounts of cash each quarter due to a combination of (relatively) outsized R&D spending to fund the "X-Gene" project and deterioration in the firm's core networking business.
Shares of the company have nearly doubled since their 52-week low of $4.28, trading at about the $8 level. The run up is primarily due to a high...
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