bp, look what happened when super intelligent Marcy took the long view with AMD. The following article was written in November. She completely takes Kurlak's viewpoint without offering any alternative ones. If you read this article back then you would be very compelled to buy boatloads of AMD (now sub 20 bucks per share). A responsible reporter wouldn't have taken Kurlak verbatim and put such a one sided spin on the issue.
I got a laugh how she stated that Intel CROWED about cost cutting during their analyst meeting. Well Marcy, that CROWING helped their gross margins increase from the low 50 to high 50 % range!
Marcy should get a clue.
Doug
AMD Shares Advance on Kurlak
Upgrade
By Marcy Burstiner
Staff Reporter
11/25/98 3:31 PM ET
SAN FRANCISCO -- Investors who have been waiting for
Merrill Lynch analyst Thomas Kurlak to upgrade Intel
(INTC) got a shock Tuesday when Kurlak instead upgraded
rival Advanced Micro Devices (AMD).
The news sent AMD shares soaring 3 1/4, or 13%, to 28 7/8
in Wednesday afternoon trading, with 6.6 million shares
changing hands, about three times average daily volume.
In his report, Kurlak upgraded AMD to intermediate- and
long-term accumulate from neutral and raised his 1999
earnings estimate by 55% to $1.55 per share. Intel was
down 5/8 to 109 1/4. Merrill does not have an underwriting
relationship with Intel or AMD.
Kurlak based his revised numbers not on the general health
of the semiconductor market but on AMD's increasing share
of the low-end PC market. He noted that Compaq (CPQ),
IBM (IBM) and Hewlett-Packard (HWP) dominate the
low-end PC market using AMD processors. Now Kurlak
expects another computer company -- he wouldn't name
names -- to announce the adoption of the AMD chip.
Kurlak is bullish on AMD not only on the low end of the PC
market but in the market for more expensive computers as
well. "With the new K-7 at 500 MHz coming next year, it will
compete all across Intel's line up through the Xeon," which is
Intel's high-end chip, he wrote in Wednesday's report. "It now
appears that both companies have similar performance road
maps; at least for the next two years, until the 64-bit Intel
Merced debuts."
Kurlak also said AMD can compete with Intel while
generating 44% gross margins in 1999.
Kurlak's upgrade of AMD comes even as he has stubbornly
held to his neutral rating for Intel, unchanged since August
1997. The Monday after Intel's Nov. 13 analyst meeting -- at
which Intel execs crowed about aggressive cost-cutting and
a general run on Celeron and Pentium chips -- Kurlak
reiterated his 1999 earnings estimate for Intel of $3.60. The
only bullish nugget in that report was a softening of tone and
an admission that his earnings estimate may be
"conservative." Intel shares have risen 6% since that report,
while AMD has dropped 4%.
In contrast, Kurlak's latest report gushes over AMD's ability
to compete against the giant chip maker. AMD's chips,
Kurlak says, deliver better performance at a much better
price. "The K-7 ... is believed to outperform the coming Intel
Katmai chips according to leading industry reports," he
wrote. |
