General Comment:
April 12, 2000...
1. Another historic date in the history of AMD is shaping up as AMD is likely to report a second successive quarter of record breaking revenues (previous record $968 million) and its second succesive record breaking quarter eps (previous $0.43)after the market close today.
2. In January, AMD forecast a slight decrease in Q1 revenues compared to Q4. Subsequently, AMD has preannounced that Q1 revenues will not only be modsetly up over Q4 but moderately up by as much or more than 10%, the most recent estimate being $1.06 billion. (Editors note: Considering Q1 is the seasonally weak quarter and Q4 is the seasonally strong quarter, an increase in Q1 revenues is an extremely positive indicator concerning the future growth prospects for AMD.)
3. Current street estimate for AMD Q1 eps is somewhere around $0.48, the same as MOT's, which is currently trading at $124 (and will strengthen significantly over the next few days owing to the hysterical over-reaction to negative Q2 comments, imho), $55 more than the current AMD price of $70...
4. AMD's forward guidance, in contrast to MOT's Q2 negative comments, could well imply the possibility of a string of 5 successive record breaking quarters come Y2000 year end, given the geometric growth curve that sales of the "spry Athy" are currently on. Within such a forward guidance scenario, a Y2000 eps between $4.00 and $7.00 becomes highly probable.
5. Over 50 million shares (about 50% of the effective float)have changed hands in the past 5 trading sessions thus establishing a new AMD cost base between $69 and $79...Availability of shares in this range could easily dry up, given the combination of continuing high volume and the formal announcement of a second successive record breaking quarter later today.
6. A formal announcement of a second successive record breaking quarter will probably elevate AMD to the "big stage" once and for all, and with such elevation comes the possibility of a significant upward pricing revaluation.
7. The recipe for a major AMD price revaluation is currently in place...Any firming by MOT and the general markets can only enhance the existing probability of a major AMD price revaluation taking place over the next 3 days! Fasten your seatbelts! |
