Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 35.53

-1.1%

Nov 14 9:30 AM EST

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To: Richard Nehrboss who wrote (51757)	4/1/1998 2:36:00 AM
From: FactBoy	Read Replies (2) of 186894

It shouldn't take more than 9 months for AMD stock price to pass INTC. Assuming that happens at $50 per share, Intel will still be valued at almost 10 times what AMD is valued at. Any rudimentary analysis should conclude that INTC is substantially overvalued even if there designs are 10% faster and 10% cheaper (which they are not). Once AMD turns on a UMC or LG as a foundry, the INTC CPU margins will plummet right past their "long term target" of 50% into the 30+% range. At that level of gross margin, the revenue multiple will be closer to 2X than the current 5X. Within a year, the INTC stock price should be right around $30 per share. Keep in mind that even at $30 per share, the market cap is huge - $30Billion - not anywhere near going out of business. AMD market cap is still under $5B. We could see a 3-5X run up. Additionally, by using external fabs, AMD could end up with the more attractive business model.

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