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Technology Stocks : Intel Corporation (INTC)
INTC 46.47-4.5%Jan 30 9:30 AM EST

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To: Bill Elliott who wrote (7530)1/7/1997 6:17:00 PM
From: Dave Budde   of 186894
 
Re: "Can anyone explain to me why wall street and individual investors are willing to price MSFT at a PE of 45+ and INTC at a PE of only 25+."

Intel must build multi-$B fabs and they need to update these regularly. If they make a mistake on products or technology, they will lose big time.

Microsoft has no such capital requirements to manufacture products.

Both companies have very hight R&D costs.

That said, neither company makes many mistakes and so both should trade are reasonably high multiples.
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