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

To: sam who wrote (46889)	7/10/2000 4:29:33 PM
From: Barry Grossman	Respond to of 93625

zdii.com July 10, 2000 8:02am First half review: Rambus top tech stock, Egghead scrambled By Larry Barrett ZDII The first half of 2000 was exceptionally strong for most chip stocks and the odd specialty software developer, but money-losing Internet retail and infrastructure stocks took a beating as investors shied away from stocks that were hyped as the next great sectors on Wall Street. Before delving into the statistics, it's important to note that measuring any stock's performance or lack thereof over such a short period of time invariably results in some exaggerated results. One dismal earnings report or a major contract win can make an enormous difference in such a short timeframe time frame. But that disclaimer should take nothing away from Rambus (Nasdaq: RMBS), the DRAM manufacturer that led all technology stocks with a 511 percent improvement in the first half of the year. Surging from just under $17 a share in late December, Rambus moved up to $103 a share by the end of June. It also delivered a 4-for-1 stock split. Rambus and other chipmakers chip makers have reaped the benefits of surging demand for PCs, network equipment and video game consoles. But perhaps the biggest breakthrough for Rambus came last month when it settled a pair of patent infringement lawsuits with Toshiba and Hitachi. Both Japanese electronics manufacturers agreed to pay royalties to Rambus to use its high-speed memory interface technology. 1st half Winners Ticker 12/31/99 6/30/00 Change RMBS 16.85 103 511% TRCD 4.87 18.06 270% VRTL 5.4 17.5 222% CIEN 57.5 166.7 190% AMD 28.9 77.15 167% SFA 27.93 74.5 166.6% RACE 2.7 6.65 143.3% HRBC 8 18.5 131.25% TRMB 21.6 48.8 125.7% **Prices as of 6/30. Top Losers Ticker 12/31/99 6/30/00 Change EGGS 16.18 2.93 -81.8% BAANF 14.12 2.62 -81.4% ELCO 34 6.87 -79.7% SCOC 30.37 6.37 -79% NEWZ 11.68 2.25 -78.6% DRIV 33.3 7.68 -77% NOVL 33.9 9.25 -76.8% CORL 15.12 3.94 -73.5% Analysts said more OEMs will be signing on later this year, giving Rambus another healthy revenue stream to accompany its thriving DRAM business. "Those settlements dramatically open up near-term royalty opportunities for Rambus," said Greg Mischou, an analyst at UBS Warburg. "Also, the rapid acceptance of the Sony PlayStation2 in Japan is another catalyst for this stock. Eventually, we see the ramping of desktop systems using its technology as well." Of course, DRAM, SDRAM and DDRAM prices are famous for their instability. As other chipmakers chip makers ramp up production, prices will certainly come down. However, Mischou said Rambus figures to survive the eventual capacity issues because the DRAM market has gone through so much consolidation in the past five years. During the last boom cycle in the DRAM industry in 1995 as many as 12 major vendors were slugging it out for market share. Now, there are only four or five competitors. "We're still 12 to 18 months away from supply issues being a concern," Mischou said. "I'd be more concerned about the demand drivers. Right now, there's strong demand for communications-equipment and broadband customers." Mischou maintains a "strong buy" recommendation and a 12-month price target of $165 a share. Morgan Stanley Dean Witter's Mark Edelstone also calls it a "strong buy" and sees the stock hitting $200 a share in the next year.