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

To: ptanner who wrote (10043)	9/23/2000 3:35:54 PM
From: Maverick	Respond to of 275872

ML:PC demand is in-line w/ expectation PC Hardware - Our Recommendations Include GTW, CPQ, DELL At These Levels (Steve Fortuna 212-449-1011) Last night Intel preannounced an anticipated top-line shortfall of roughly $300 million, citing weakness in Europe as the sole cause for the miss. Given that weakness in Europe is old news, we think other factors may be at work here. We believe many of Intel’s customers may have over-ordered during the summer months in anticipation of processor supply constraints. In point of fact, Intel’s execution over the past couple of months with respect to supply has been considerably better than expectations. We believe Intel may be feeling the effects of inventories being worked down by second-tier PC OEMs as well as the distribution channel. The top five PC vendors, which comprise roughly 45% of Intel’s microprocessor units, typically manage inventories in a much tighter fashion. We expect that once these inventories are brought in-line, Intel will once again feel the true demand pull for PCs as opposed to the current distorted picture. On the margin, Intel could also be feeling some increased pressure from AMD. Indeed, our recent checks with the PC OEMs, suppliers, and the channel, all suggest that demand is generally in-line with expectations on both the corporate and consumer sides for the top-tier vendors. We believe the market is going to significantly overreact to the Intel news, creating investment opportunities in the PC space. Our recommendations include Gateway (GTW, $51, C-2-2-9), Compaq (CPQ, $22 7/8, B-2-2-7) and Dell (DELL, $37 15/16, B-1-1-9) at these levels.