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[All -- important news]
08:45am EST 11-Feb-97 Lehman Brothers
(Adv. Micro Dev: Expect Confirmation Tonight K6 Silicon Committed
Ticker : AMD Rank(Prev): 1-Buy Rank(Curr): 1-Buy
Price : $33 52wk Range: $36-10 Price Target: $ 45
Today's Date : 02/11/97
** MEETING WITH CFO TONIGHT; EXPECT TO HEAR K6 SILICON NOW COMMITTED
********************************************************************
EXPECT TO HEAR TONIGHT THAT K6 IS "ESSENTIALLY ON TRACK."
...
Also, expect to hear that AMD has received (or soon will) permission to
use Microsoft's "Windows" logo on its chip, indicating it has passed
Microsoft's compatibility tests.
but the K6 should, at worst, start at the Pentium/586-166/200 performance
level and move higher.
...
Pentium/586-150 sells for $161, but its Pentium-MMX/200 sells for $539.
AMD 4Q96 sold 1.1 mil. K5s at a price averaging under $60 (K5 units
and pricing could both be up this quarter as speeds improve); the K6
is expected 2Q97 to ship several hundred thousand units at a price
likely to be in the $200 area. The K6 is the key reason to anticipate
much better profits as the year progresses.
.... But recent discussions with well placed AMD engineers suggest
the K6 project is now moving extraordinarily smoothly.
''''
1 MAINTAINED; 1 YEAR TARGET OF $45. AMD and INTC may both ship MPUs, but they
are entirely different investment vehicles. INTC is exceedingly well
established and, to us, appears 20-30% underpriced. It could well hit $200 by
mid-year as most investors ignore or dismiss AMD. And, if AMD's K6 does
stumble, INTC should then move much higher. Even if AMD's K6 succeeds (15-20%
unit volume market share during the next 18 months), INTC could still trade at
or above current levels in 18 months. AMD, however, appears destined to move
either sharply higher or sharply lower based on the fortunes of its K6.
During the next few months, we believe the market will largely ignore the
question of "if one wins, does the other lose?" and both stock should make
progress. By June, that should change. |
