Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 47.14

-6.1%

Feb 10 3:59 PM EST

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To: Ibexx who wrote (23625)	6/2/1997 6:48:00 PM
From: Ibexx	of 186894

All, H&Q Update on Intel (continued)--Read at own risks. ______ OPINIONS: (by Rob Chaplinsky) 1) We (H&Q) believe Intel's near-term revenue weakness is all related to product transition issues where the company is unable to meet the overwhelming demand for MMX processors and related to overall weaknes in PC demand. 2) We believe this issue is a short-term problem and that Intel will ramp production of MMX processors to a level where they will represent greater than 40% of the product mix by the end of 1997 and close the yearly mix at greater than 60% of total sales. 3) Due to lack of visibility in seasonality and in the MMX manufacturing pipeline, we are estimating $1.74 for Q3 but believe this is very conversative and expect that we will increase estimates later when Intel provides Q3 quidance. 4) Intel continues to see strong demand in the corporate PC desktop space and in emerging markets. We believe the real softness is retail PC demand and Europe. 5) We are not anticipating any inventory writedown due to weaker demand in classic Pentium because overall worldwide market demand for microprocessors remains healthy. 6) We believe Intel is not experiencing softer demand due to competitive pressures from the microprocessor clones. 7) We are conservatively estimating earnings to grow at 26% in 1998 but revenues to grow at 30% due to the rapid ramp of the Pentium II processor modules. Investment Summary We believe the stronger than expected market demand shift to MMX is an indicator of the strength of Intel's brand and marketing capability. The market clearly wants the latest and greatest technology from Intel and is willing to delay purchases until Intel can meet demand. We believe this pre-announcement does not indicate that Intel is losing its competitive position nor does it show that overall market is slowing. We also expect Intel's analyst meeting next week (this week--Ibexx) in New York will be upbeat and therefore will restore confidence in Intel's market position and overal health of the market. Other near term catalysts for INTC include the upcoming rollout of the new 0.25 micron Pentium MMX mobile processor as well as the already announced 2 for 1 stock split. We maintain our BUY rating. _______ An Intel strategy paper will follow later this evening. Ibexx PS: the above was posted in the interest to share, not to advocate buying or selling of this stock.

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