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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (38745)	3/22/2000 6:54:00 PM
From: Don Green	Read Replies (1) \| Respond to of 93625

Rambus Shares Surge on Analyst Comments Story Filed: Wednesday, March 22, 2000 6:07 PM EST SAN FRANCISCO (Reuters) - Shares of Rambus Inc.(RMBS.O), a developer of a technology to speed up computer memory chips, surged Wednesday after a Morgan Stanley Dean Witter analyst set a new price target of $500 a share. Rambus soared 31 percent to 350-3/8 on the Nasdaq stock market, where it was the biggest net gainer, after Morgan Stanley analyst Mark Edelstone said in a note to clients that recent events, such as an endorsement from chip giant Intel Corp. (INTC.O), suggest that the Rambus investment story is on track. Rambus develops a technology that speeds up computer memory chips, so they can keep pace with increasingly faster microprocessors. The company licenses its designs to memory chip companies, which pay royalties to Rambus. But the stock has been controversial as some memory chip makers are reluctant to pay royalties on a more costly technology. ``We believe that Rambus offers significant earnings power,' Edelstone said in his note to clients. ``Since we believe that Rambus DRAMs (chips) will account for half of the overall DRAM market by 2003, we believe that the company's three-year growth rate will exceed our prior expectations, and we have adopted a three-year (2000-2003) compound annual growth rate of 130 percent.' Edelstone's comments came after Rambus shares tumbled sharply on Monday and Tuesday, due to investor jitters about the political situation in Taiwan, a home of several chip companies, and after negative comments on one Web site about Rambus's memory-enhancing technology. The Web site, tomshardware.com, said that its tests revealed that Rambus technology actually degrades the performance of PCs using it when compared with identically configured systems based on cheaper memory technology. Edelstone was not immediately available for further comment. In his report he said that Rambus has one of the ``most attractive intellectual property franchises in the semiconductor industry.' He noted that as royalty revenues increase during the next several years, Rambus's net margins should be able to exceed 50 percent. ``They will probably end up becoming one of the highest profit margins ever enjoyed by a semiconductor-based company,' he wrote.