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Politics : Formerly About Advanced Micro Devices

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To: TimF who wrote (115255)	6/10/2000 4:19:00 PM
From: pgerassi	Read Replies (2) of 1580458

Dear Tim: Wildly Optimistic Numbers: In two years (4Q 2001), Intel and AMD both make 40 million CPUs at an ASP (they learn to live with each other) of $200 per quarter. That gives each about $8 billion per quarter in CPUs. Expenses would be about $2 billion yielding about $6 billion plus about $500 million from other (mostly flash). That gives a profit after taxes of about 4.2 billion per quarter. That works out to $25 per share, or about $100 per year. At a P/E, like Intels now, of 60 gives a very top end price of $6,000. If interest goes back to a 2% real rate over inflation or about 4%, the "fair" value would be more like a P/E of 25 or 30. Thus a more sensible $2500 to $3000 per share would result in a valuation of $500 to $600 billion. All of this is possible given current roadmaps but, highly unlikely. NOTE: THIS IS NOT WHAT I THINK WILL HAPPEN! Pete

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