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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 231.80

+1.7%

Jan 16 3:59 PM EST

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To: BUGGI-WO who wrote (191538)	4/1/2006 8:54:25 AM
From: Cravey	Read Replies (1) of 275872

Buggi, But I'm much more worried about your revenue forecast for Q1. I never said my guess was right, but can explain the reasoning. Relevant Data Points (all total processor) Q105 Processor Revenue $7611 ($6861 I + $750 A) Q405 Processor Revenue $8636 ($7329 I + $1307 A) Q105 Revenue y/y growth +16.3% Q104 Revenue y/y growth +21.9% Q404/Q105 Revenue q/q <1.1%> Q403/Q104 Revenue q/q <7.9%> So going conservative on the yr/yr growth (say 10%) ends up with total processor revenue of $8372 ($76111.10). Going a little more aggressive than normal on q/q (9%) ends up with a revenue number of $7858 ($8636.91). So I am taking the lower number of $7858 for my estimates. The ongoing growth of notebooks and servers (higher ASPs) at a higher rate than desktops seems to be driving the higher revenue gains vs the unit numbers. Intel did $10.2B in revenue for Q405 of which $7.3B was processors (72%). They have given revised, revised guidance to be in the $8.9B range. That is a reduction of $1.3B of which at least $933M (1.3 x .7185) is processors. Total market of $7858 less Intel sales of $6396 ($7329 - $933) leaves a market of $1462 for AMD. Add in the PCS and other category of roughly $45M and you get to my $1.5B in revenue. How do they get there? They picked up at least 10 points in US retail market share Q105 vs Q404 - good for an additional 600K units or so. I expect more of the same in other consumer segments around the world. They continue growing ASP as dual core and Turion have become more prevalent. And Opteron keeps gaining share (at a lower rate). Why would I not believe Hector? For Q405, guidance was 7% to 13% sequential growth. AMD delivered 34%. For Q1, it is flat to slightly down. They can do 10% based on my numbers above. Of course, if the market totally tanks, everything would be thrown off. However, I think the market dynamics are working in AMDs favor. It looks to me that Enterprise replacement (Intel strength) is off and Consumer/SMB is pretty strong. So, that is how I got to the $1.5B. No guarantees, this is a message board afterall. Cravey.

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