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

To: Rick Jones who wrote (70796)	9/2/1999 4:44:00 PM
From: kapkan4u	Read Replies (1) \| Respond to of 1575704

<My crystal ball says costs continue to fall and demand, especially for PentiumIII and Xeon continues to explode. If anything drives the stock off its recent highs, it will be a market implosion, not difficult business conditions.> Did it occur to you that healthy PeeIII and Xeron sales might be the result of IT managers closing this year's purchasing few months early due to Y2K validation issues? Kap

To: Rick Jones who wrote (70796)	9/2/1999 9:01:00 PM
From: tejek	Read Replies (1) \| Respond to of 1575704

Rick RE <<<Anything specific creating this anticipation? My crystal ball says costs continue to fall and demand, especially for PentiumIII and Xeon continues to explode.>>> Yes, for the following reasons: 1. PC sales are slow; up only 13%....lowest increase in years; while supply of CPU's is increasing. 2. So far, most of the sales as well as market share growth has been in the low/celeron end where I believe profits are minuscule. In addition AMD is recapturing some of the low end market share. 3. Profits in high end pcs probably will trend down with new competition from AMD even if AMD only ships 1000 Athlons @ 650 in Q3 and Q4. 4. Increased competition from VIA and IBM. And I would not underestimate either one of them. IBM was this monster blob for several years but seems to be getting its act together and wants more of everything re market share in PC's. Until now intc has had the market mostly to itself. 5. Level One was a costly purchase; and now I am hearing that its chips were at the end of their product cycle and Level One did not have new ones in the pipeline. That would seem to be confirmed by a recent article which says intc is giving the former CEO for Level One billions to acquire more firms in order to build up their telecomm chip sector. 6. INTC's stock price has been jumping based on the promise of a better Q2 and the extraordinary power that analysts can wield. I am not sure intc can come through. In addition the same thing is being tried on Dell with analysts giving upgrades etc but it does not seem to be working this time. Dell jumped a couple of points but seems stuck again and this is after Dell has been treading water since 2/99. Again I think it is the perceived weakness of the PC market and the increasing concentration of sales in the low end. 7. INTC's net server farms are an interesting concept to consider but I wonder how much inroad they will make since it is a new business for intc. Plus I think there will be a significant cost outlay before there is one cent of profit. All of the above I feel will negatively effect intc's asps and in turn the bottom line. BTW I do not think intc will be the only one to suffer but I think that it is particularly vulnerable. So why am I long AMD......for some emotional reasons and because if it can pull this one off, it has the greatest upside of an pc chip company. BTW I make this argument outside the current thread war between AMD and INTC. And believe it or not, its not a biased report. I stock trade for income and I can't afford to have personal biases effect my purchases. If I am wrong, this is one sector I probably won't make much money in the second half. ted