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

To: chomolungma who wrote (82907)	6/19/2002 12:24:30 PM
From: niceguy767	Read Replies (2) \| Respond to of 275872

chomolungma: "I just don’t get it. I read these boards and AMD stockholders seem to take some sort of comfort in their losses if Intel is suffering too. Is this any reason to invest in a stock?" No comfort at all in AMD losses...q2 is a shocker for AMD and certainly the loss magnitude is outside my range...The "I told you so" INTC posters on this thread aren't differentiating between "company" and "economic" causative factors...Many of the pro-INTC posters are currently suggesting AMD performance is tied mainly to "company" factors...I suggest such evaluations are likely highly erroneous and, in any event, cannot be measured until comparative INTC q2 performance is available... "I have read several times that AMD is cheap because when it’s compared to Intel using any standard valuation tool, it is a fraction of Intel. But for AMD to sell at Intel like valuations, it would require that AMD become Intel. And for AMD to become Intel, it follows that Intel would have to become AMD. Do you follow?" AMD at 2:1 is cheap on the basis of most financial models that are based upon the past 2 years performance and future growth potential...Let's wait 'til INTC posts their q2 numbers before jumping to too many conclusions about how much INTC is outperforming AMD... "What if, for example, AMD did gain 50% market share? In this type of duopoly, the profit margins would be more like airline profit margins, not the profit margins Intel saw in the 1990s. So it’s a no-win situation for AMD. Even if they succeed, the shareholders don’t win. Who came up with this business plan? It’s the most absurd model I’ve ever seen." If AMD has 50% of a $35 billion pie, I doubt very much if you'd see an AMD market cap of $3 billion and I doubt very much if you'd see an INTC market cap of $130 billion...Check your airlines market caps again...

To: chomolungma who wrote (82907)	6/20/2002 6:26:19 PM
From: TimF	Respond to of 275872

I just don’t get it. I read these boards and AMD stockholders seem to take some sort of comfort in their losses if Intel is suffering too. Is this any reason to invest in a stock? I agree with you on this. It doesn't help AMD longs if Intel goes to 3 and AMD goes to 4... I have read several times that AMD is cheap because when it’s compared to Intel using any standard valuation tool, it is a fraction of Intel. But for AMD to sell at Intel like valuations, it would require that AMD become Intel. And for AMD to become Intel, it follows that Intel would have to become AMD. Do you follow? I think that the size and relative stability of Intel mean that it deserves a premium over AMD. The argument is just that it shouldn't be quite so big. What if, for example, AMD did gain 50% market share? In this type of duopoly, the profit margins would be more like airline profit margins, not the profit margins Intel saw in the 1990s. I don't think the profit margins would be like airline profit margins. I think you are however right that they would be much lower then what Intel saw in the 90s. I think if AMD got 50% of the market they would have a lot more profit then they have ever had before, but I think that Intel would go down more then AMD would go up in this scenario. I also consider the scenario to be very unlikely. Tim

To: chomolungma who wrote (82907)	6/20/2002 7:04:03 PM
From: tejek	Respond to of 275872

I have read several times that AMD is cheap because when it’s compared to Intel using any standard valuation tool, it is a fraction of Intel. But for AMD to sell at Intel like valuations, it would require that AMD become Intel. And for AMD to become Intel, it follows that Intel would have to become AMD. Do you follow? Comparing the AMD stock to INTC makes no sense. INTC is a Dow and Naz component....that means it has to be in every indexed fund. Aside from the indexed funds, most other funds maintain at least a small position in the stock and the institutions love it because it is a tech bellwether that has a long history of profits. The combination of the two, indexing and profitability, means INTC is held right up to the last possible moment before it's dumped. Its why INTC is one of the last tech stocks to correct.....and usually is a sign of tech capitulation. AMD, on the other hand, is a typical tech stock that generally moves with the SOX and crashes at the slightest hint of trouble. There is no real comparison other than over the past three years, AMD has done slightly better albeit with large divergences at certain times during that 3 year period. ted