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Technology Stocks : Dell Technologies Inc.

DELL 125.42

-6.2%

9:34 AM EST

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To: Patrick E.McDaniel who wrote (131242)	6/5/1999 11:25:00 PM
From: Bill Fischofer	Read Replies (1) of 176387

Re: INTC vs. DELL PE The reason for INTC's relatively low valuation is that INTC must invest billions each year to support its investment cycle. Most folks know about "Moore's Law" which states that the number of transistors on a chip doubles every 18 months. But Moore also has a "second law" which states that the cost of a semiconductor fab doubles for each generation of chips. Despite INTC's position as the dominant semiconductor company, these huge (and growing) investments result in the market demanding a higher "risk premium" (i.e., lower PE) than alternative investment which do not have such capital requirements.

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