Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: TBF who wrote (71365)	9/8/1999 9:20:00 AM
From: Dan3	Read Replies (2) of 1574782

Re: would anyone care to opine why significant upside still exists in the near-term for AMD? Stock valuation can be done in many ways, but most of them center around a time discounted net present value. So you want to look out several years. I'm not going to try to extend out many quarters. Just look at the near term so I won't bother with a time discount. Next year for AMD might (I said might!) be pretty spectacular. They would need to have success with the copper .18 process. Likelihood well below 100%, but if you put likelihood at .25 then assign a risk premium of .75 to the potential of half the high end profits (about $2 to $3 billion - pick your own number) and p/e of 25 you get an expected value (based upon $17/share earnings) of .25 x .75 x 17 x 25 = $80 share. Note that if things do work out for AMD the stock price would no longer have the .25 probability multiplier and the stock price by next summer would be $320. Not gonna happen! But there is still plenty of room to go above $23. Dan

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