A NECESSARY word on Intel (Nasdaq: INTC): Today Tom Kurlack,
an analyst infamous for his changing views on semiconductor stocks,
voiced yet another opinion. In 1996, he thought that Micron Technology
(NYSE: MU) would earn some $15 per share in 1998. Now the company
is actually expected to lose money this year. Today it was said, and I
quote, that Kurlack "[s]ees Intel Corp. locked in a losing battle with its
customers who want lower prices."
Get real.
Intel initiates its price cuts, increased its price-cutting schedule voluntarily,
and is leading in the low-end market just as it does in the middle. While the
move to 0.25 technology will lower Intel's manufacturing costs even more.
The more chips that you can put on a wafer, of course the less expensive
they are to produce, so expect more price cuts from Intel in the years
ahead, as always, as is Intel's plan from the beginning. Also, Intel has the
most growth potential in the expensive high-end market, especially
beginning in 1999.
Kurlack can be an amusing fellow. That Intel is "in a losing battle with its
customers" is one of the most amusing things that I've heard. Where are the
customers going to go? Customers are, of course, happy that Intel has
continuously lowered prices, and I don't see anyone about to protest
against the company demanding even more price cuts -- "Or else, Intel,
we'll take our business elsewhere!"
I guess we should thank Kurlack for the buying opportunity if the stock is
lower come March 1. |
