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

To: Yougang Xiao who wrote (93025)	2/14/2000 2:28:00 PM
From: Yougang Xiao	Read Replies (1) \| Respond to of 1572100

From Albert: GS upgrade: 08:01am EST 14-Feb-00 Goldman Sachs (NEWYORK) AMD ACTION Advanced Micro Devices, Inc. : FULL ACTION in the A.M. - U.S. GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS GS Goldman, Sachs & Co. Investment Research Advanced Micro Devices, Inc. * * FULL ACTION in the A.M. - U.S. * * New York Investment Research (New York) - - Investment Research =================== NOTE 7:54 AM February 14, 2000 ==================== 1. Advanced Micro Devices, Inc. (AMD) $45.25 Joe Moore (New York) 1 212 902-6834 Nathaniel Cohn (New York) 1 212 357-7512 EPS (FY Dec): 2000E US$1.90, 2001E US$2.00 - Market Outperformer * During their presentation at our conference on Friday, AMD indicated that business continues to come in slightly above expectations, with clear possibility for further upward revisions. We are raising estimates for Q1 from $0.35 to $0.42, slightly higher than the company's guidance, which brings our full year to $1.90. We are also raising from market performer to market outperformer; while the upward revision was the catalyst, there are also several other positive factors driving that decision. * The company cited upside from K6-2 units, but also implied that there could be upside to our flash memory estimates. We continue to think that the K6-2 business is likely to slow when Intel comes out of its supply-constrained situation, but there are several other positive factors to consider: 1) flash estimates are likely extremely conservative, with signiificant further upside leverage potential; 2) continued strong execution on Athlon positions the company to maintain strong high-end performance; 3) follow on Athlon products in the second half will migrate Athlon costs down, allowing competitive performance in the value segment, and 4) recent hire of COO Hector Ruiz strong longer term positive. The strong flash performance should offset potential competitive fallout in the processor business in the first half, with stronger seasonal strength in processors in the second half; as a result, there is strong probability of further upward revisions. * There are still significant risks in processors, most notably that the competition at the low end has been muted due to Intel's overall constraints. We do expect dramatic ramp in Celeron speeds in the first half, pressuring K6-2 somewhat, and Athlon will still be constrained to the higher end of the market due to the expense of cartridges. Flash pricing is also unusually high, leading to possibility that any short pause in wireless could cause immediate weakness in that space. Nonetheless, the other factors cited above offset this weakness somewhat. Important Disclosures (code definitions attached or available upon request) AMD : No Disclosures

To: Yougang Xiao who wrote (93025)	2/14/2000 2:59:00 PM
From: tejek	Respond to of 1572100

From Albert: Pru Upgrade: Prudential has it right even as far as admitting that at $56, they are undervaluing AMD compared to the rest of the chip industry.

To: Yougang Xiao who wrote (93025)	2/14/2000 7:05:00 PM
From: Charles R	Respond to of 1572100

<EPS FY Year P/E 1Q 2Q 3Q 4Q Actual 12/99 $ (2.18) N/A $(0.81) $(1.08) $(0.72) $0.43 Current 12/00 $ 1.90E 23.9X $0.41E $0.39E $0.46E $0.64E Prior 12/00 $ 1.00E 45.5X $0.23E $0.14E $0.24E $0.39E Current 12/01 $ 3.00E 15.2X Prior 12/01 $ 1.85E 24.6X> I really wonder what assumptions these guys use to get to lower EPS in Q1 compared to Q4 in the face of increasing revenues! <AMD Valuation We are raising our 2000 and 2001 EPS estimates to $1.90 and $3.00 from $1.00 and $1.85 respectively. Our revenue estimates are $4,100 million and $4,825 million in 2000 and 2001, up from $4,000 million and $4,750 million respectively. At 3.5 times book value (versus 9.3 times for its comps), 2.3 times sales (versus 8.7 times for its comps), and 15.2 times 2001 calendar EPS estimates (versus 31 times for its comps), we believe that AMD is a compelling value proposition. In fact, if you consider its flash business, which we estimate to be well in excess of a billion dollar business this year, AMD's current stock price is reflective of its flash business plus the value of its fabs alone. Assigning the stock a conservative 18.5 times 2001 EPS multiple (still a significant discount to the 31 times multiple other fabbed semiconductor companies enjoy), we arrive at our $56 price target based on our $3.00 2001 estimate.> Bravo! This guy finally had the guts to move to Accumulate from Hold.