From "Red Herring", re:TK and Chaplinsky
Intel plays to the fans
It's getting a little crowded on the bullish side of Intel. At least four investment houses raised their ratings on Intel's stock to Buy or Strong Buy, despite a lone attempt at quashing a rally by analyst Thomas Kurlak of Merrill Lynch. Mr. Kurlak downgraded the semiconductor giant from Buy to Accumulate, staking out his turf as the one bearish analyst who thinks Intel doesn't have a chance of turning it around this year. Mr. Kurlak's research is based on the belief that sub-$1,000 personal computers won't do much for Intel's revenue growth and that the real growth in the chip business will be in communications, not PCs. Those may be his views and God bless him, but there are plenty of others who think he's plain wrong.
Our choice for most valuable player in this Intel game is Robert Chaplinsky of Hambrecht & Quist. Mr. Chaplinsky was one of the first analysts to up his recommendation on Intel, nailing the bottom of the stock before it took off on its recent 15-point run. "We talked to some of their executives and concluded they were very bullish on the Pentium II and that their business was doing well," said Mr. Chaplinsky. "From there, we heard from Intel that their bookings were also doing well, that they would be introducing new products, and we just decided to buy before the analyst meeting." You've gotta love an analyst who doesn't just follow the herd.
And what of Mr. Kurlak's defiant stance against Intel? "He did his best to kill the rally ... because he thinks sub-$1,000 PCs will hurt Intel's revenue growth, but he couldn't do it," explained Mr. Chaplinsky. "In fact, I think his punch power is going to be weakened from here if he continues to take this position." The bottom line from
most of the analysts we talked to is that Intel's gross margin erosion and revenue decline will bottom in the September quarter, just as the company had predicted, and that with a pick-up in semiconductor demand, Intel should have a very good second half of the year. |
