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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Tony Viola who wrote (103591)	5/23/2000 12:20:00 PM
From: Robert Douglas	Read Replies (3) \| Respond to of 186894

Tony and everyone, Bear Stearns raises estimates to $3.10, 2000 and $3.60 for 2001. STRONGER POSITION FOR SECOND HALF We believe Intel is improving its competitive position to take advantage of strong demand for microprocessors in the second half of 2000 and 2001. The company is shipping a richening mix of Pentium III speed grades and a larger number of total units thanks to continued improvements in its 0. 18 micron manufacturing. It is also readying its next generation Willamette 3 2-bit architecture to ship in the fourth quarter in high end and mid-range retail and corporate desktop PCs, which we believe will result in undisputed performance leadership in the PC microprocessor market again. Recent checks with industry sources lead us to the conclusion that the company is achieving higher than expected functional and speed yields on its Willamette microprocessor, giving Intel the confidence to launch Willamette in both the high end and mid-range desktop PC segments. This will force the Pentium III into the value segment of the market earlier than previously thought, providing a competitive advantage against AMD, which will be challenged to introduce a new microarchitecture equivalent to Willamette in performance in the same time frame. Furthermore, Intel appears to be on schedule to introduce its Itanium 64-bit architecture to the market later in 2000, which we believe will provide a significant psychological positive event for investors. Intel appears to be in excellent competitive shape, having weathered a significant challenge from the Athlon processor without sparking a major price war or sacrificing appreciable market share. RAISING ESTIMATES, REITERATE BUY RATING We are boosting estimates for Intel slightly to reflect the stronger market demand and the company's improved ability to meet this demand. Our new Q2 EPS estimate is raised from $0.71 to $0.72, ignoring the announced charge to account for replacement of defective Pentium III motherboards. We are raising our 2000 EPS estimate from $3.05 to $3. 10, and our 2001 EPS estimate from $3.50 to $3.60. We believe Intel is in front of some of the best microprocessor market conditions it has seen in years, and it is beginning to benefit from the aggressive technology development and acquisitions it has made in the server and communications markets over the past few years. We think Intel has become a very attractive stock on the recent correction, and we reiterate our Buy rating. We maintain our $160 12-month target price.