Bruce,
Much of where Intel is headed in my opinion depends on where the market decides to price stocks (ie, 10 P/e, 20 P/e, etc.)
A lot also depends on execution.
I'm pessimistic on the future of Intel's stock price for MANY reasons.
For example, what will earnings look like in Q1, Q2, and Q3 of next year? Intel has taken investment gains of $725 million, $2.3 billion, and $900 million this year. Business could be great next year, but earnings could be down YoY because they can't repeat these investment gains. How much more MU can Intel sell?
Another area of concern I see is the high end processors. With the 1.13 Ghz recall, it's pretty clear the old Pentium has topped out and there isn't much room left. This leaves it up to Willy which will be paired with only Rambus memory for the next year. The Dramurai are refusing to make Rambus memory, so Intel will be limited in ramping the P4 by lack of infrastructure they cannot control until an alternative chipset is out. Without this highend, I think earnings are in some trouble going forward.
BTW- I'm not recommending that anyone buy AMD. I think they will do well capitalizing off of this "dead zone" at Intel's high for the next year, but I'm not convinced the stock will react favorably, especially with the uncertainty of the semiconductor cycle and general market outlook.
chic |
