From Albert: GS upgrade:
08:01am EST 14-Feb-00 Goldman Sachs (NEWYORK) AMD ACTION
Advanced Micro Devices, Inc. : FULL ACTION in the A.M. - U.S.
GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS
Goldman, Sachs & Co. Investment Research
Advanced Micro Devices, Inc.
* * FULL ACTION in the A.M. - U.S. * *
New York Investment Research (New York) - - Investment Research
=================== NOTE 7:54 AM February 14, 2000 ====================
1. Advanced Micro Devices, Inc. (AMD) $45.25
Joe Moore (New York) 1 212 902-6834
Nathaniel Cohn (New York) 1 212 357-7512
EPS (FY Dec): 2000E US$1.90, 2001E US$2.00 - Market Outperformer
* During their presentation at our conference on Friday, AMD indicated
that business continues to come in slightly above expectations, with
clear possibility for further upward revisions. We are raising
estimates for Q1 from $0.35 to $0.42, slightly higher than the company's
guidance, which brings our full year to $1.90. We are also raising
from market performer to market outperformer; while the upward revision
was the catalyst, there are also several other positive factors driving
that decision.
* The company cited upside from K6-2 units, but also implied that there
could be upside to our flash memory estimates. We continue to think
that the K6-2 business is likely to slow when Intel comes out of its
supply-constrained situation, but there are several other positive
factors to consider: 1) flash estimates are likely extremely
conservative, with signiificant further upside leverage potential; 2)
continued strong execution on Athlon positions the company to maintain
strong high-end performance; 3) follow on Athlon products in the second
half will migrate Athlon costs down, allowing competitive performance in
the value segment, and 4) recent hire of COO Hector Ruiz strong longer
term positive. The strong flash performance should offset potential
competitive fallout in the processor business in the first half, with
stronger seasonal strength in processors in the second half; as a
result, there is strong probability of further upward revisions.
* There are still significant risks in processors, most notably that the
competition at the low end has been muted due to Intel's overall
constraints. We do expect dramatic ramp in Celeron speeds in the first
half, pressuring K6-2 somewhat, and Athlon will still be constrained to
the higher end of the market due to the expense of cartridges. Flash
pricing is also unusually high, leading to possibility that any short
pause in wireless could cause immediate weakness in that space.
Nonetheless, the other factors cited above offset this weakness
somewhat.
Important Disclosures (code definitions attached or available upon request)
AMD : No Disclosures
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