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Technology Stocks : Intel Corporation (INTC)
INTC 48.80+0.2%2:47 PM EST
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To: COMMON_SENSE who wrote (139371)7/17/2001 12:08:40 PM
From: t2  Read Replies (2) of 186894
 
the most negative comments about Intel by Mr. Osha were regarding Intel's valuation. Mr. Osha told clients that Intel's forward looking PE is 52 times estimates.

Osha is looking at Intel as if its chips are interchangeable with those of AMD and Transmeta. That is just not the case in the real world even if head to head comparisons show that they are. Intel has brainwashed the consumers over the years into insisting on "intel inside". They have definitely done it the corporate market; otherwise companies like Dell would be offering AMD. It is not just about price and performance.

I would not underestimate Intel's ability to raise prices as soon as they see a pick up in demand and that should happen with Windows XP and a pick up in the economy. That is what Osha's comments do not factor in...an ability to accelerate profits on the part of Intel.
Intel's large capital spending budget is pointing to this expectation of better profits. IMHO, they are not underestimating the potential of XP on Pentium 4 sales (and profits) even if some analysts are. Manufacturing efficiency is being increased.

I am going to bet on Intel's management and not on some analysts. Might have to endure a bit more short term pain on the stock...I can accept that.

You can bet that AMD hopes Intel starts raising prices because they will quickly follow the lead. By raising price, I mean having new launches at a high enough price and not aggressively cutting like before.
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