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Politics : Formerly About Advanced Micro Devices
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To: greg nus who wrote (31089)4/6/1998 5:27:00 PM
From: Maverick  Read Replies (2) of 1580045
 
ADVANCED MICRO DEVICES INC. (AMD) 30 7/16 +1 7/8. With one more day to go
before this maker of the K6 chip reports its Q1 results, shares are moving up on the hopes that
much of the bad news associated with its production K6 problem is already out in the open. In the
past couple of weeks, Wall Street has turned more favorable on the stock on the view that AMD
has been successful in addressing its production yield problems. In fact, some firms suspect
that AMD could become profitable again one to two quarters ahead of schedule. It was only one
month ago that this chip maker surprised Wall Street again by warning that Q1 losses would
wider than the losses it reported in Q4 and that revenues for Q1 would show a sequential decline
as well. At the time, the stock was trading at under $22 3/4 and it temporarily dipped to $21
before bouncing back. Just last week, BA Robertson Stephens upgraded the stock from "market
perform" to "buy" while Prudential Securities also raised its view on the chip maker from "hold"
to "buy." This morning, the stock has been the beneficiary of an initial "buy" rating from Piper
Jaffray which has allowed the stock to advance further, despite the fact that a loss of $0.25 a
share is still expected to be reported tomorrow. Last year, AMD earned $0.09 a share on
revenues of $552 million. In Q4 of 1997, it lost $0.09 a share on revenues of $613.17 million.
Nonetheless, Piper Jaffray is optimistic that the yield problems are fixed and that low production
costs should provide AMD to make further in-roads in the low-priced PC market. In addition,
its 100 MHz platform is expected to provide performance advantage over Intel's Celeron chip.
The firm has a 12-month price target of $40. By Briefing.com
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