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

To: xun who wrote (107706)	4/25/2000 12:52:00 AM
From: Charles R	Read Replies (1) \| Respond to of 1574491

panic, <Assume AMD makes $7 EPS in 2000, my AMD target prices are: $150 at July earnings report; $180 at Oct earnings report; $210 at Jan earnings report.> For AMD, I try to be conservative with any prediction of earnings or stock prices beyond the current quarter. As much of an AMD bull as I am, I do not believe this company has attained a level of stability that justifies too high a PE. I will be very comfortable holding this stock with a 20 PE. Somewhat fidgety if it reaches 25. And at 30 and beyond, I may be a net seller. A lot depends on how I see Wilamette and Sledgehammer coming through. If Wilamette slips into 2001 and Sledgehammer stays on track, a PE of 30 or above may be justifiable. If AMDs execution on Athlon/Sledgehammer flounders and Wilamette ships millions of units in Q4 then a PE of 15 may be too high. The reason the company is doing so well right now has as much to do with Athlon as it has to do with current market conditions and Intel management's incompetence. I feel reasonably comfortable forecasting Athlon MHz ramp (and CuMine's). The other factors are a much tougher call. Who would have guessed Intel would screw up as much as it did? If Intel had its act right, AMD would be gaining today but not nearly as much as it is doing now. And, EPS of $1+ wouldn't have happened until Q2 or Q3. <How would you rate my estimates? > It is a guesstimate! So are mine and everyone else's. Through the last 6 months I have been steadily upping my estimates based on AMD's execution and market conditions. When I throw out a number like the $6 that I throw around, that is the number that I see very little downside to. I dare say that NO ONE who understands the business can forecast how much AMD is going to make this year with an accuracy of $1 or even $2 - the unit and ASP sensitivity is simply too large and the sandbagging from AMD management does not help. Just look at the analyst scene - I think most, if not all, the analysts out there have current estimates that will not come within $0.50 for Q2. So, if anyone guesses the year with a accuracy better than $1, I can assure you it has nothing to do with accuracy and everything to do with luck. <Do you worry about irrational exubrance on this thread or simply laugh all the way to the bank and party?> Both! The potential is HUGE and the possibility that something will go wrong is SMALL. This is where one needs to play very close attention - it is easy to get into a bull trap here. I am glad to see that this thread is still one of the best threads on SI. Cheers, Chuck