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Politics : Formerly About Advanced Micro Devices

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To: Aaron Cooperband who wrote (4927)1/31/1997 10:31:00 AM
From: Brian Hutcheson   of 1576956
 
Aaron , Re . AMD paid too much . The question should be was the purchase of the talents of Vinod Dham , Atiq Raza and their talented team which were involved in the design of the Pentium a few years ago plus the almost working design of K6 going to increase the potential worth of AMD by over 30% . My answer is by a much greater factor it now puts them in serious contention in the most lucrative high margin business . That fact alone will multiply any earnings growth by a considerable amount from a P/E perspective . The greatest variable in a stock price is not earnings but what valuation investors put on those earnings hence P/Es of 500 or more . As the earnings grow in such a case, investors anticipate even greater increases so the P/E ramps up .
regards Brian
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