From wallstreetcity.com
Stocks in Focus Feb 22 1999 10:21AM CST
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Rambus - Get In For The Long Run
by Blair G. Jeffery
Senior Investments Analyst
Rambus Incorporated {RMBS} has seen its share of bad days in the market recently as the high
speed processor chip manufacturer concern's stocks has slacked from the $109 high on the 11th of
January to Fridays' close of $71, the lowest point for the stock in over four months.
As one of the stocks taking the brunt of the most recent tech shunning, Rambus officials say that
the stock has been the victim of slower than expected quarters and concerns over the initial ramp
in direct RDRAMs for this year.
Warburg Dillon analyst Greg Mischou commented on that very subject this morning in a note to
clients. "I believe that Intel remains firmly committed to driving Rambus to become the next PC
main memory standard, which I feel will be reiterated at next week's Intel Develop Forum."
If the aforementioned prediction happens, it could mean that concerns over the ramping of the new
DRAM chips may have been a little hasty. Obviously, such a happening would bring the Rambus
stock roaring back from the grave.
Mr. Mischou despite the admonition of the oversold condition warns that the actual big drive in chip
growth may not happen until the 2000 year. "Although DRAMs may be somewhat supply
constrained during the 2nd half of 1999, I feel that the mass market adoption will occur in 2000,
creating explosive EPS potential."
If Intel {INTC} can help boost investors and customer sentiment even higher for the DRAM chips,
the stock will surely follow. Mr. Mischou is a firm believer that just this scenario will happen and he
says that the weakened condition of the stock creates a tremendous opportunity to "participate
fully in a truly unique story."
The stock has taken notice today, gapping up from the $71 Friday close to add 7 1/8 currently to
78 1/8.
Rambus Incorporated {RMBS: NNM} designs, develops, licenses, and markets high speed chip to
chip interface technology to enhance the performance and cost-effectiveness of computers,
consumer electronics and other electronic systems.
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