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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Yousef who wrote (70162)	8/29/1999 1:48:00 AM
From: Mani1	Respond to of 1572921

Yousef Re << Please explain to me your logic for being "long" AMD right now ... This should be good. <ggg> >> You are not worth my time. Mani

To: Yousef who wrote (70162)	8/29/1999 11:49:00 AM
From: Dan3	Read Replies (1) \| Respond to of 1572921

Please explain to me your logic for being "long" I can only speak for myself (not Mani) but I am also long AMD. There remain 2 major players in the volume CPU market, Intel and AMD. This market is worth about $6 billion per year in net profits - and right now all of those profits are going to Intel. Recently, (much to its own amazement, I would guess :-) AMD has found itself with what appears to be a manufacturable design that outperforms Intel's present designs. This only came about because Intel set its sights on the vision of VLIW technology implemented at 64 bits. At the same time Intel began counting on Rambus technology being competitively priced and providing a meaningful performance advantage in the time frame of Q1-Q2 1999. The VLIW vision to be embodied in Merced and McKinley may or may not prove to have been worth the trouble, but meanwhile it has been a major distraction to Intel and has resulted in delayed development of its traditional CPU technology. At the same time, Rambus is looking like more trouble than it's worth in terms of cost and its failure to improve upon latency, the biggest issue for cache equipped processors. So Intel also has had its chipset and motherboard programs delayed and confused. I use the term luck to refer to the notion that some development programs work out well and others don't, and its just impossible to know in advance which will do what. Programs that meet or exceed their expected outcomes can be said to have experienced good luck, the reverse is bad luck. Of course, it isn't really luck, it's hard work and engineering skill that succeeds or fails. There has been a coincidence of bad luck for Intel, at a time when AMD has - finally - encountered what may be some of its best luck in a long time. That has led to a reasonable chance that AMD could capture something on the order of a third of those available CPU profits. As a company with costs about a quarter of Intel's, if AMD captures those profits - which can't happen until mid 2000, at the earliest - I expect it to do wonders to its share price. The market being driven by anticipation, I expect the share price to rise slowly but steadily through that period. Just to put it all in perspective, $2 billion in profits with 150 million shares out at a P/E of 20 would give a share price of $265. Do I expect that anytime soon? No, but I expect something a lot higher than the present price. That's why I'm long AMD. Dan