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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Belite23 who wrote (84199)	6/22/1999 1:33:00 PM
From: Maverick	Read Replies (1) \| Respond to of 186894

DLJ sees INTC downside risk to $45-50 INTC runs into more trouble today, as DLJ cuts estimates for FY99 and FY00, and says that "we would use the current rally in the sector to trim positions in INTC and would be market weight to underweighted in the name at this juncture. We see prospective price risk in the shares to the $45-50 level." Though Intel has recently been hurt by the news that its next-generation PIII 600 chip has been delayed, DLJ's move was prompted by concerns that Intel has seen a faster than expected shift to its lower margin Celeron chips. DLJ did not formally downgrade the stock, but the downside price risk to $45-50 tells the story. Though Intel had a nice run late last year, we have been arguing for better than a year that Intel is not the place to be in the tech sector. We looked wrong for a quarter, but take a look at the charts and you see that INTC has been dead money by tech sector standards -- it first hit $50 back in mid-1997, and it might break back through that level soon. The paradigm shift from processor speed to bandwidth is hardly new, but it's still very potent. It is becoming increasingly difficult for Intel to push customers to faster processor speeds and their higher prices, hence the shift to the low price, low margin Celeron. These issues are not temporary for Intel as processor speeds are now so fast that the upgrade cycle for chip customers will never again be as short as it was just a few years ago. The new growth sectors in techs are telecom equipment and services. Run down the list -- CSCO, LU, TLAB, and WCOM -- and you have a much more compelling list of growth stocks than you do with INTC. Today's DLJ estimate cuts provide yet another reminder that while INTC might still be the leading chip maker, it is no longer the leading tech stock. By Briefing.com