Yaacov - Re: "Where are we going from here and what is the future of INTC in 1997? INTC has made very little progress as far as the share prices are concerned comparing to MSFT."
I think you need to look at the real data.
Intel closed at $65.49 (Split Corrected) on 12/31/97 and Microsoft closed at $82.63 that same day.
Today, with Intel at $88.75, that yields a 35% increase. Microsoft has done better, closing at around $144 for a 75.5% increase.
So, Intel hasn't done too badly.
Now consider the problems Intel has had to contend with -AMD's K6, presumed by many to be the Intel Killer, Dan0411 FPU bug, DEC lawsuit for patent infringement, Cyrix's M2 and weak Pentium/Classic sales. This represents a lot of problems for Intel to overcome and yet today they closed at an ALL TIME HIGH.
Microsoft is more dominant in their field. Their software products have so many bugs that nobody cares anymore because nobody can keep track of them all! Microsoft also panders to Intel's competition - just look at the nifty Windows Logo they gave AMD to put on all their K5 and K6 chips.
As for Intel and the rest of this year, I expect their share price will continue to rise based on their overall performance. However, one possibility may occur that will accelerate their sales and stock rise - and that is decreased competition from AMD due to superior device performance and cost competitiveness from Intel.
If the end of Q3 shows that AMD has not achieved major tier 1 customers and/or their yields on the K6 are stll poor, and/or that their conversion to 0.25 micron process will not occur at that drop of Jerry Sanders' hat, then the financial community will recognize Intel's continued. and perhaps accelerated dominance in technology (0.25 micron process and manufacturing) as well as marketing (maintaining loyalty among the tier 1 customers).
I tend not to make absolute dollar predictions so I won't. However, Intel's past stock performance can be extended quite easily if their relative competitive position vis-a-vis AMD is maintained or improved.
Now, 1998 will bring yet more goodies from Intel. Their Katmai chip will have MMX2 capability, the Auburn AGP graphics chip will be out, their new chip set (beyond the 440BX) will have AGP2 support, and all the while Intel will be getting the Merced closer to overflowing its banks. So, 1998 will be a landmark year for Intel, despite the uncertainties of this year - 1997.
If Intel has a good year next year, and Altera, Cisco, etc. do well, I may plan a trip to Lugano and pay you and your investment bankers a visit. I generally prefer early to mid-October, after the tourists are gone. Please remind me, OK? I would greatly enjoy meeting you and celebrating with you and your friends.
Paul |
