Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Dan3 who wrote (104833)	4/13/2000 2:36:00 AM
From: ptanner	Read Replies (2) of 1575627

Dan <With AMD now clearly competitive and successful, holding a 16% market share that is growing steadily, its valuation should fairly rapidly move to between 10% and 25% of Intel's. Resulting in a share price of $300 to $750.> Trying to disagree (a little) agreeably... The market share -> market cap argument is too simple. AMD doesn't have 16% of the entire MPU market which yields Intel's high earnings -- yet. For example, one article I read noted that for 1999 Xeons were only 4% by units but represented 15% of revenue and probably much more than 4% (but less than 15%) or earnings (I am assuming slightly lower yields and/or otherwise slightly higher cost). I look forward to AMD entering the server and SMP realms but progress will be slow as the products will require acceptance from customers requiring reliability. I agree fully that AMD is still undervalued compared to the market and especially the semis, but some of the latter seem to be in iNut land; before todays CC I was feeling perhaps AMD was closer to a fair valuation but not anymore! Intel has long seemed undervalued to me but I haven't followed the semi market long enough or closely enough to have observed the bad cycles. Certainly in comparison to a memory producer I would have to believe that the two MPU producers have much greater control over their future so represent lower risk. Great quarter, great products, and great board. PT

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