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Technology Stocks : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: Winston Kim who wrote (1319)	1/22/1998 4:45:00 PM
From: William T. Katz	Respond to of 16960

Winston, I understand your sector-based reasoning. But I guess I'm curious as to how you are thinking .08 is low? Do you have a model where you assume a certain revenue % growth, margins, etc.? We know that revenue will grow substantially already ... that is factored into .08 earnings. Some of the substantial unknowns are the margins and their costs, particularly for advertising and R&D. If they have ramped up R&D substantially, it would cut into eps for this qtr but pay dividends down the road. I'm not saying we don't have substantial upside possibility from .08, but I'm just trying to be conservative. Also, I think 3dfx continues up - the rate is unknown. I just read in PC Magazine that Acer is planning a series of low-cost specialized PCs, including a Game PC. The target price was supposed to be between $200-$500. I think this really plays into what I was saying before: 3dfx has a great shot at being the de-facto standard for the specialized low-end gaming PC just as it had a contract before with Sega. -Bill