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Technology Stocks : AMD:News, Press Releases and Information Only!
AMD 203.76-1.1%3:59 PM EST
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To: Mark Brophy who wrote (2143)11/14/1997 8:44:00 PM
From: Paul Engel  Read Replies (1) of 6843
 
Mark - Re: "Should I buy some when the price goes down to 15? 13?"

A year or so ago, AMD dropped down to $10 and hovered around $12 - $15 for quite awhile.

The tacit assumption, however, is will AMD return to much higher prices?

Proabably, yes.

But the dynamics that drove AMD to $49 in the past summer no longer exist. At that time, the popular perception was that AMD was going to sell millions and millions (per quarter) of K6's at $200 to $400 per chip and take major market share away from Intel.

Sanders once again pulled his version of "populisim" over the unsuspecting eyes of analysts and investors - that little old AMD had pulled a miracle out of a hat with an amazing design and amazing wafer fab process. Fab 25 was constantly referred to as a MegaFab!

When was the last time you heard somebody use the word MegaFab to describe Fab 25?

Intel has shown that it will drive down ASPs to protect its market share at all cost. It has done this and only taken minor "hits" on its own ASPs.

In the interrvening time, AMD has suffered from low yields and financial losses - they can't make the K6 in high enough volumes and yields to be profitable.

And now AMD is suffering from high level management defections/firings - essentially airing their laundry publicly. And AMD may not have the depth or momentum to keep the ball rolling with their "main man" (Vin Dham) now seeking greener pastures.

The question you really should ask yourself is, under the "bestest" of circumstances, how high can AMD go back up?

And, what better investment vehicles are out there that can do as good or better, with less risk?

Paul
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