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

To: Piranha who wrote (1396)	1/27/1998 11:54:00 PM
From: Peter S.	Read Replies (1) \| Respond to of 16960

The competition is feeling the heat... bootnet.com Good luck TDFX investors. It looks like I was overly cautious about this stock but you can't win them all. I'll console myself by go back to my Tomb Raider 2 and kill some sharks in glorious 3D. Peter S

To: Piranha who wrote (1396)	1/28/1998 3:11:00 AM
From: Matt Webster	Read Replies (2) \| Respond to of 16960

Tomorrow... I expect TDFX to gap up tomorrow and make a run for 28. I do not believe that it is sustainable, however. The great number of today represents the seasonality of Christmas sales, and I do not think the next two quarters will show the same sign of growth. When analysts see growth decelerating, they start to worry. For this reason, the explosive growth will in the short run be a retardant for this stock because people will question whether the good news is priced into it via the high PE and whether that PE is sustainable into the intermediate future. I am very bullish on 3D but I do not expect it to remain a $150-300 add-on, like TDFX's current model. I expect Intel to use its own breed of 3D to generate new demand for PC's via integrated motherboard chipsets. I also expect competition from 3D enabled K6's and Cyrix/NSM products. These will make TDFX' margins unsustainable at these lofty levels and will cloud the outlook. I tend to underestimate the momentum power of winners, so my 28 target may be low. I did this with Citrix and Dell, cutting off future profits for fear of watching paper profits disappear. Still, I think the future picture for 3D and niche players like TDFX is sufficiently unclear that caution is the word. Therefore, slowly unwind positions as the price spirals up (assuming it does) and be careful about averaging up into "greed." Good luck, Matt