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

To: dhellman who wrote (34968)	4/5/2001 6:00:28 AM
From: dhellman	Read Replies (1) \| Respond to of 275872

No more hiding out in PC-related semi stocks (Bulletin ran 4/04/01) AMD cut to "Neutral" Was this ML downgrade "Bulletin" yesterday responsible for the bloodletting? This has the appearance of a CYA downgrade in a Bear environment where the stocks that climbed the most in the worst sector are the easiest targets. Sheesh! Based on our belief that demand from the low end of the PC business may not be meeting our previous expectations, we are reducing our intermediate-term investment recommendations for Advanced Micro Devices (AMD $20.74; C-2-1-9 to C-3-1-9) and Micron Technology (MU $34.60; C-1-2-9 to C-3-2-9). Our intermediate-term rating for AMD has been reduced from Accumulate to Neutral. Our rating for Micron has been cut from Buy to Neutral. Both Micron and AMD have performed well since the beginning of the year in comparison to the broader market and to other semiconductor stocks. That performance has been based on the expectation that demand from the PC business, especially in less expensive products sold outside of North America, is relatively solid. Evidence during February and March tended to support that thesis. AMD’s March microprocessor numbers will only be down slightly from the December quarter. The DRAM business has seen firming pricing since the beginning of the year. However, some of the improvement we’ve seen can be ascribed simply to inventory restocking efforts, following a dramatic drawdown late last year and early this year. That’s especially true for DRAM. Here's the troubling, hard to quantify part: We’ve said that we needed to see a convincing demand follow-through to support continued intermediate-term optimism for the stocks. Our checks, and comments from our Asia Pacific semiconductor analyst Dan Heyler, do not suggest that we’re getting that follow-through. (J. Osha) [dh]