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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: Paul A who wrote (16588)	5/24/2001 9:43:12 PM
From: JohnD	Read Replies (1) \| Respond to of 30051

Paul A, Your post makes a pretty good segue into my thoughts - there seems to be quite a bit of speculation that Intel will issue an earnings warning early in June. If actual P4 sales are as lousy as some speculate, this could be something to consider... FWIW, JohnD

To: Paul A who wrote (16588)	5/24/2001 10:21:21 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 30051

Paul, short term, yes, I can see INTC going down to the low $20' particularly if they issue another warning. As for the medium term, I think that the combination of .13 microns and 300 mm wafers are going to get their cost down quite drastically. AMD for the short term is definitely a better bet (but I would wait for at least a retest of the $27/$28 area in the next few weeks. For the long term, if INTC is indeed continuing to back RDRAM, particularly for those applications where "semi random" fetching and very high speed of long "strings" is required, and if DDR does not catch up fast enough, there is still a possibility (without royalties on DDR) that the bu$$ will do well. Figure it that way, some time in the next three years, the whole DRAM market should be at around $40 B, of which I would expect RDRAM to be at least 15%, or $6 B which should yield about $90 MM in royalties, or $.90/share (discounting the taxes against additional applications which by then should be about 35% of the business). Now, under normal circumstances, that forecast should not justify much more than $9/share, but with hype and ups and down and dreams of dominance in the market in general, don't be surprised when sometime over the next three years these lousy 90 cents are valued at a PE of 40. And guess what, that gets you exactly to the major overhead resistance of $33 or so. A lot of things have to go right, and a lot of things are still going to go bad (thus my old forecast of single digit for the bu$$ still stands), but keeping an eye on this one, may still be worthwhile. After having gone through three major run ups with it (and escaping the following dizzy declines), maybe I should let this one go, but, once having gone on the bu$$ ride, I find this to be too difficult (g). Zeev