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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Fiondella who wrote (42040)	12/12/1997 5:24:00 AM
From: Arik T.G.	Read Replies (2) \| Respond to of 186894

Paul, Here's the bear's opinion on INTC First of all let me say that I'm a gloom and doomer (Dow 4500 and even lower within two years), and I believe that YHOO, AOL, DELL and even the great MSFT would take a much greater hit then INTC. But in the last month it was the manufacturing techs that were hit - KLIC, SEG, MU - and not the sw cos. Intel is a great company, but one that clearly cannot show double digit growth in the coming Qs. 1. Price per unit: Since 80286, 14 years ago, and until 2 years ago, the ppu of the high end chip was in a slow ascending trend from $300 to $450, and the previous generation cost was steady around $120. In Dec '95, retail price of 486DX4 100 was $110, and the high end P-120 was $480 (P-133 just became available). In Dec '97 the P-MMX166 sells (retail) for $170 and the PII-266 for $700 (PII-300 is almost 1k) Other components of the PC were on steady or slightly declining price trend. The 40MB HDD of 1986 cost almost the same as 400MB of 1993 and 3GB HDD of today. On the average, a high end (home) PC cost was on a slow decline until 3-4 years ago (from $2200 to $1600) and then steady. While ignoring the improvement in each component (CPU, HDD, RAM), one should not discount the fact that there are more components to today's PC- CD, modem and sound card are standard in a home machine today, unlike 10 years ago. Thus, the %age of CPU price in the home PC has risen steadily from 8% to 12% lower end and from 25% to 30% high end. This cannot continue. The $400+ chips just won't do in a home machine, cause the costumer can reduce the cost SIGNIFICALLY by choosing a lesser CPU. Buying MMX driven machine instead of P-II cuts 20% off the top! And what use do you have for a P-II at home that the MMX cannot do? In two-three years we'll be using NT at home, and be needing the P-II, but then it would be a <$200 chip. The current use for P-II is for NT (server) bussiness machines. Growth of this sector is much more dependent on the economic environment then home machines. One can predict that multiple CPU servers would boom, which would be great news for Intel, but how can one predict that? 2. Unit sales Wow, this is already very long. Some other time then. In conclusion, I see no reason for INTC to reach $80 in the next 6 months. Q4 IMO would be 86c-90c, 92c if the servers market is that good. If there's no stock market crash early next year (i believe there would be one) then INTC can resume upward trend as early as April '98. T.A. suggests more downside short term. ATG

To: Paul Fiondella who wrote (42040)	12/12/1997 5:27:00 AM
From: Arik T.G.	Respond to of 186894

Another thought, Was the market wrong three years ago when INTC was (split adjusted) trading for $15 or three months ago when it crossed over $100? IMO wrong both times. ATG

To: Paul Fiondella who wrote (42040)	12/12/1997 3:33:00 PM
From: Lee Penick	Read Replies (2) \| Respond to of 186894

Paul, Re - "I wish somebody here could tell me what they think this stock is worth and back it up with something more that how many gates are o nthe head of a pin." We could tell you what we think it is worth, but that has no correlation with the current trading price. I use to have a lot more faith in the efficient market theory than I do today. Fear and panic seem to be playing a very large roll in investing. Everyone is out for the quick play, and trading when scared. Some of the best companies in the world are selling pretty cheap. Some sellers are going to feel very unhappy in the future. As for now, your calls on the short term have been very good and certainly better than mine. I didn't think short term fear would overpower Intels prospects for the future as it has...in the short term. Now that we are at $70, what is your best guess. Do you really think 60 is justified for one of the great tech companies? That would be a p/e of about 15! Trading question, when you short, do you protect the upside by buying a call or do you risk it? I don't think I would have the stomach to risk that one. Do you actually short, or buy a Put? Final question, are you really anti-Intel in the long term? If so, who is going to be better? Even if you like AMD or Cyrix, they can't seem to make a profit, and if Intel keeps the screws to them, "profits look elusive" as Jerry said. thanks, Lee