Re: it's funny that Barron's recommends DELL, HPQ, IBM, MSFT, all the large PC OEMs and OSVs, yet they somehow think that strength in the PC market doesn't translate to INTC
As an investment, Intel is a cash cow priced as a growth company, which is too high - they've have 80+ percent of a stagnant market, so the most they'll ever grow by increasing share is 20%. They've lost several fortunes trying to move into other industries, so their fate seems to be tied to the same old cash cow it's always been tied to.
Meanwhile, their one competitor, AMD, has been gaining steadily in each of the past 1.5 to 2 year semi process cycles. It's not a straight line progression. Intel recovers some at the beginning of each cycle, such as last quarter, then AMD gains more ground.
Intel has also latched on to a rather nutty business plan, which involves abandoning it's X86 franchise to AMD, and attempting to set up new franchise with Itanium for the coming 64-bit CPU generation. If that backfires on them (and, so far, Itanium sales have been very discouraging) they could lose dominance in their primary business.
So, Intel's upside is quite limited, and the downside looks worse and worse as more news of X86-64 progress is released - with IBM's support from its premier database, DB2, being the most recent example. |
