Intel Shares Rise to Record on Optimism for PC Demand (Update1)
Intel Shares Rise to Record on Optimism for PC Demand (Update1)
(Updates with closing share activity.)
Santa Clara, California, Nov. 19 (Bloomberg) -- Intel Corp. shares rose 2.7
percent to a record amid optimism that personal- computer sales will
remain strong next year.
The shares of the world's largest computer-chip maker rose 3 to 112 7/8
in trading of 23.5 million, making them the third-most active stock in U.S.
markets. Earlier, the shares touched 115 3/16, an all-time high.
Intel shares, in the doldrums for much of this year, started rising last
month when it became clear that consumers were buying lots of new PCs
for the back-to-school and holiday seasons even though the U.S.
economy is slowing. Now, some investors say PC demand will be strong
next year as well as businesses replace older PCs, in part to remedy the
Year 2000 computer bug. ''It looks like (1999) will be a good year,'' said
Michael Murphy, chief investment manager at Murphy Investment
Management in Half Moon Bay, California, which has 5 percent of its $10
million invested in Intel. ''A lot of PCs are getting sold.''
Many older PCs are expected to malfunction when the date changes from
1999 to 2000. Rather than trying to fix those machines, Murphy said,
companies will simply buy new ones, boosting demand for chips. Santa
Clara, California-based Intel makes the microprocessors that run about 80
percent of the world's PCs.
Comdex
Intel shares are rallying today in particular, Murphy said, because many
analysts and investors are coming back from the Comdex computer show
in Las Vegas and are encouraged about what they heard from companies
displaying products there.
Executives from PC companies at the show said they're optimistic about
PC sales next year. Eckhard Pfeiffer, chief executive of Compaq
Computer Corp., for one, said he expects demand to remain strong next
year because companies are rolling out PCs with new features that
buyers will want.
Compaq, the No. 1 PC maker, and others plan to start selling PCs that
have faster Internet access in the new year. Pfeiffer said he expects the
machines to sell well because many people are now buying PCs
specifically to get on the Internet.
The rally in Intel shares accelerated on Nov. 11, a day after the company
said fourth-quarter revenue will rise as much as 10 percent from the
previous quarter, amending earlier guidance that sales would rise just
slightly.
Analyst John M. Geraghty at Gerard Klauer Mattison & Co. today
reiterated his ''buy'' rating on Intel. He expects the shares to reach 120
within 12 months.
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