Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 45.07

-17.0%

3:59 PM EST

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To: Terje Oseberg who wrote (2099)	7/10/1996 3:55:00 PM
From: Andrew Chow	of 186894

Your 486/Pentium/PPro comments are valid concerns. The traditional top end Intel offering (~$700) is now above the hi-end of the Pentium lineup. This is the traditional signal that a processesor transition is occurring. This in turn means that INTC needs to see rapidly increasing volumes of its new hi-end offering (ie. the PPro) to drive profit growth. The market is gonna be skeptical about a PPro ramp for a number of historical reasons. First, INTC's stock has usually lagged during such a transition. Second, historically such transitions take a longer peiod of time than INTC will have "budgeted" for this current transition. Third, market analysts will forsee a lack of compelling apps to absorb the newly available CPU cycles. The fact that using historical extrapolation to forecast technology trends is dubious at best will probably be ignored. Against these negatives is arrayed the sole positive - namely a corporate upgrde to NT4.0 cycle. So personally I'm with you on a period of flat to sub-optimal returns on INTC for up to a year, perhaps triggered by the conf call after 2Q earnings, when INTC will say "future earnings growth is dependent on PPro growth which is not immediately visable" or some such boilerplate. Of course you need to remember that everything is relative. If INTC is flat for the rest of the year, it'll still be up a not too shabby 27.5% (not including that awesome 5 cent quarterly dividend) for the year. And we did remember to buy our annual INTC quota at 56 and not at 72, right? So unless we see a major increase in rates, which WOULD imply the need for sharply lower P/E's, it's not clear to me that shorting INTC is a better move than shorting PIXR, USRX, NSCP or any of a number of other ridiculously valued stocks.

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