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Technology Stocks : Intel Corporation (INTC)

INTC 50.59

+4.9%

Feb 6 9:30 AM EST

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To: Paul Engel who wrote (33540)	10/2/1997 4:40:00 AM
From: Paul Engel	of 186894

All - An Upbeat Report on AMD Please note one error in Jonathan Joseph's analysis. One institutional broker - the Genuinely Brilliant Erika Klauer - has a STRONG BUY on AMD ---- see the following: techstocks.com Paul {=================================================} zdnet.com October 1, 1997 6:00 PM ET AMD shares gets whacked By Larry Barrett, ZDNN It may be the beginning of a new fiscal quarter, but it's the same old song and dance from Advanced Micro Devices Inc. Company officials on Tuesday announced what most analysts had expected for some time. Lower-than-expected yields on its K6 microprocessor will result in an operating loss substantially larger than anticipated in the third quarter. "I don't know why anyone would want to buy this stock right now," said Jonathan Joseph, an analyst at Nations Bank Montgomery Securities. "Their strategy is flawed because they're pricing their chips at 25 percent below what Intel's fifth-generation Pentiums go for. They're not doing this because they want to but because the market is making them." AMD's stock on Wednesday was down $4 per share to $28.56 in early-afternoon trading. In early September, AMD announced it expected a small operating loss in the quarter because it would ship just "slightly more" than 1 million K6 processors. Now, they've revised the estimate downward to 1 million processors in the third quarter. "The yield difficulties is a serious issue because it causes two big problems," Joseph said. "It costs more to manufacture because you have fewer good die candidates and the speed grades are hit, too." Virtually every institutional broker has a "neutral" rating on the stock. "They have massive problems," said one analyst who spoke on the condition of anonymity. "They have no chance against the massive machine of Intel and they could use a change in management. Of course, that's not going to happen any time in the foreseeable future." AMD will announce its third-quarter results on Oct. 7.

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