Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 207.58

-1.5%

Dec 15 3:59 PM EST

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To: dougSF30 who wrote (1182)	7/19/2000 1:43:38 AM
From: Petz	Read Replies (1) of 275872

doug, re:<Petz, if you think a P/E of 20 is fair for AMD, what about the other semis?> Remember, I said a PE of 20 * estimated PEAK EARNINGS. For AMD, that would be assuming 10M CPU's/qtr at an ASP of $120 plus $500M in flash revenue/qtr plus $100M other/qrt. Thats 7.2B per year with 4.4 B breakeven = 2.8B profit = $15-$16 per share untaxed = at least $10 taxed. Without a new fab thats about all they could make, and by time a new 12" fab comes on line every else's will also, so...... But, to answer your question, I think many are overvalued. I don't really believe there is any niche in the semi's that is immune to THE CYCLE. Stocks like ALTR (45x Y2001 earnings), RMBS (240x Y2001 earnings) come to mind as overvalued, but many are in the 20-30x Y2001 earnings area -- slightly rich but not if the estimates are conservative. With AMD we have a double blessing: 1)the market is not even giving us 20x estimated Y2001 earnings and 2)the analysts estimates have been proven time and again to be WAAY LOOOWW. Petz

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