Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 217.53

+1.5%

Nov 28 9:30 AM EST

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To: Tenchusatsu who wrote (60165)	10/25/2001 1:43:49 PM
From: AK2004	Read Replies (1) of 275872

Ten re: as long as that share is sustainable? you like that word, don't you? ok, I can see meaning in sustainable earnings or profits but there is very little meaning in sustainable market share per say. re: What's so magical about 30% I have not done calcs myself so I can not verify if 30% is a right target but from rough estimates it looks very reasonable. The consideration are given to cost of staying in business, expected profit margin and risk. Intel commands currently 4x of amd's market share and charges higher asps. Does that mean that amd should have more than intel's market share to stay in business, absolutely not. AMD's margin requirements are lower and costs structure is different from intel that is amd may be viewed as the company on another side of efficient frontier. And here is my justification for 30% - AMD proved that it can be profitable at 20% or even less under normal conditions. But the risk premium is way too high because of Intel and Intel proved that risk is there (amd lost 200 mil last quarter due to price war). AMD needs to get to the point where risk adjusted return is positive and at least equal to risk free rate. Is it 25%, 30%, 35%? I do not know for sure but it is clear that it is higher than current 22% and 30% looks reasonable Regards -Albert

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