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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (147844)	6/25/2002 3:42:52 PM
From: TimF	Respond to of 1585479

ALISO VIEJO, Calif. (Reuters) - Internet retailer Buy.com on Tuesday declared a price war on books with Amazon.com , saying it would beat its rival's prices by 10 percent. The move is part of an "aggressive strategy" to win Amazon's customers and capture greater market share in online book sales, privately held Buy.com said in a statement. Buy.com, best known for selling computers and electronics, said it wants customers to know that it is also a leading seller of books. Seattle, Washington-based Amazon.com derives most of its sales from books, CDs, DVDs and videos.

To: TimF who wrote (147844)	6/25/2002 5:27:22 PM
From: AK2004	Respond to of 1585479

06:21am EDT 25-Jun-02 Prudential Securities, Inc. (H.MOSESMANN 650-320-1631) AM AMD:UPGRADING TO BUY DUE TO POSITIVE FEEDBACK ON OPTERON & COMPELLING VALUATION AMD: UPGRADING TO BUY DUE TO POSITIVE FEEDBACK ON OPTERON & COMPELLING VALUATION PRUDENTIAL SECURITIES June 25, 2002 Advanced Micro Devices (AMD - $8.70) -- NYSE ----- ANALYST(S) -------------------- -------- OPINION ------- Hans C. Mosesmann 650.320.1631 Current: Buy Brett S. Pollack 212.778.1161 Prior: Hold Risk: High Target: $12.00 Industry: Market Outperform The senior analyst(s) does not have a material position in any of the stocks mentioned in this report. ----- EARNINGS ------------------------------------------------------------ FY Rev EPS P/E 1Q 2Q 3Q 4Q Actual 12/01 $3,891.8A $0.09A 96.7X $0.37A $0.05A ($0.28)A ($0.05)A Current 12/02 $3,152.0E ($0.99)E NM ($0.03)A ($0.48)E ($0.33)E ($0.15)E Current 12/03 $3,700.0E $0.50E 17.4X ----- FUNDAMENTAL -------------------------------------------------------- Avg. Volume: 5,500,000 Div/Yield:NA EPS Growth: 0.00% Market Cap: $2,971 m 52w Range:30.20-7.70 P/E / Growth: NM Shares: 341.45 m ----- BUSINESS ----------------------------------------------------------- Advanced Micro Devices (AMD), headquartered in Sunnyvale, CA, focuses on two major digital semiconductor product segments: microprocessors (MPUs) and non- volatile memories. Although AMD is a key player in several high-growth product areas, the focus for investors over the years on AMD has been as a MPU supplier (supplier of x86 Windows compatible MPUs). ----- HIGHLIGHTS ---------------------------------------------------------- * Upgrading AMD to Buy from Hold on 1) incrementally positive news on Opteron (Hammer) processor at top-tier PC OEM, and 2) compelling value at 0.84 P/B. * Next generation Opteron may be further along than we had anticipated. * New 12-month price target of $12 up from $10. ----- DISCUSSION ---------------------------------------------------------- We are upgrading AMD to Buy from Hold as an interesting trading opportunity on two elements: 1) early feedback on performance of new Opteron (AMD's next generation x86 processor, formerly known as Hammer) at a top tier PC OEM, and 2) valuation. Recent industry feedback from a top tier PC OEM is surprisingly bullish on the Opteron's performance. Industry contacts have also indicated that the Opteron processor is raising flags at Intel (INTC-Buy, 19.33) in terms of how that company will respond to this recent dynamic. This is of particular interest to us given that unlike AMD's Opteron which offers a dual 32/64 bit architecture, Intel offers two separate solutions: 32 bit only or 64 bit only (Itanium). Some in the industry view AMD's solution as more effective given that the transition to 64 bit computing may be a more gradual process. While we have been neutral on Opteron as a catalyst for the shares given that this processor is not expected to ramp until the end of 2002, we are surprised by the strong early feedback, which suggests that AMD may be further along than we had anticipated. AMD shares are at 0.84 P/B (price to book) and traded as low as 0.78 P/B on Monday, close to the levels seen only during three down-cycle periods over the past 10 years: July 1992 (0.73), July 1996 (0.71), and September/October 2001 (0.73). The difference this time around relative to the troughs seen in 1996 and 2001 is that semiconductor industry growth rates are improving on a year over year basis, not getting worse as was the case in 1996 and 2001. In other words, we believe the semiconductor industry is in a recovery mode today, not on the way down. While we expect the summer to be tough for AMD and the PC end market, we view the downside from current levels to be minimal for the shares. Furthermore, we think a return to book value levels of $10.30 for AMD is quite reasonable in the second half of 2002 on the prospects alone of a return to some semblance of seasonality in the consumer PC space, which is AMD's key area of processor exposure. We are upgrading AMD to Buy from Hold. Our new 12-month price target is $12 based on a 15% premium to book value, which we view as quite reasonable given the incrementally positive news on the new Opteron processor.