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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: brushwud who wrote (7361)	9/2/2000 10:47:04 AM
From: niceguy767	Respond to of 275872

brushwd: Fair enough...square root of 50 based on revenues...I should be more specific, I guess, as my reference point was market cap which currently puts INTC at $500 billion and AMD somewhere around $11 billion. I just don't think INTC's market cap deserves a multiple of 50 to AMD's particularly when as you have pointed out revenues are only 7 times AMD's... But more specifically INTC's current revenue growth rate is 1/3 that of AMD's and INTC's p/e multiple is 3 times AMD's...Think about it...Just doesn't maks sense...AMD should be trading, at the minimum, at INTC's price...Major price adjustments are required... Can you cite any other $2.8 billion, soon to be $5 billion company with a current growth rate exceeding 50% and a p/e multiple based on current year eps of 12? For that matter, can you cite me any $2 billion plus company with a 25% growth rate that does not have a p/e multiple exceeding 25? For growing profitable companies, p/e multip[les normally exceed current growth rate...If this were the case for AMD, given its current growth rate of 50% and estimated Y2000 eps of $3.50, AMD should be trading in excess of $150...It is within the context of this very basic "evaluation model" that I would suggest that "AMD is a bargain at double its current price".