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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 95.45+1.3%3:59 PM EST
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To: Eric K. who wrote (42405)5/17/2000 3:24:00 AM
From: The Prophet  Read Replies (2) of 93625
 
If you check the AMD thread far back enough you will see that I have been suggesting it since it was at 20 dollars two years ago. That being said, since trading at 70 earlier this year, and even now, RMBS is the better value.

RMBS' proper valuation is somewhere between $500 and $1400 depending on whether it ends up earning royalties on SDRAM and DDR, and depending on its penetration into the communications chip market. It is worth $500 alone based on RDRAM and logic and controller devices. Here's the math - approx $100 billion total market 3 years out on RDRAM and related logic and controllers x 60% market share x 1.5% avg royalty x 60% net margins (taxes and expenses) x 25 p/e.

As for AMD, the risk of INTC's double whammy (integrated low end Timna processor and corporate desktop Willamette) to AMD's business model is very high, especially once INTC ramps up to .13 at all plants and cuts low end prices by 60%. Whenever this happens, invariably my good friend Jerry ends up pre-announcing a surprise loss based on "ruthless price cuts."

You are deluding yourself, Eric, if you really believe that AMD is the better value.

Fortunately, the proof is in the pudding and I have a very, very long memory.

Prophet
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