Robert -
I have been buying Intel stock off an on for the last 7 years for 2 main reasons: 1) their share price valued vs.projected earnings has been consistently cheap, and 2) they have an effective monopoly on the PC CPU market, making a cheap purchase even more safe.
At current price levels the stock seems undervalued by at least 50%, still making it cheap, and thus either a buy or a hold, but not a sell. I am concerned, however, about whether or not they can maintain their monopoly long term.
I see no effective rivals to Intel if we assume the status quo continuing into the future. Over the past 7 years (and probably longer) there have been many scares that their dominant position would be eaten away by rival CPU manufacturers. These concerns have always turned out to be overblown, and I see no reason for that to change.
The one potential problem which I envision, however, is Microsoft's new version of NT which is usable on non-Intel standard platforms. If a user of Windows/NT-compatible software can jump from one platform to another with indifference, via the new NT software, then Intel's monopoly is effectively nullified.
What I'm wondering about is not the current situation, where Intel clearly still holds the advantage over its rivals, but the situation 2-3 years out where Microsoft has worked out all the bugs in their "universal" NT. Will this version of NT really enable users to be truly hardware independent? If so, how will the performance of non-Intel CPUs compare to that of the then-standard PentiumPro/PentiumPro2 when running NT?
Aaron Cooperband |
