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

To: Time Traveler who wrote (32214)	4/28/1998 1:04:00 AM
From: Buckwheat	Respond to of 1572537

VG,,, Did you and Stockman see this one? news.com Buckwheat

To: Time Traveler who wrote (32214)	4/28/1998 10:40:00 PM
From: Adrian Wu	Read Replies (1) \| Respond to of 1572537

Time Traveler: <Socket-7 is fading away> Only 30% of consumer PCs sold last month had slot 1. <K6s have not proved yield solved> I have sources which indicate that they have solved the yield problems. <Depreciation expenses due to ever higher R&D is sky-rocketing> This is pretty much true of any high tech company. <K6 family members are forced to price lower due to Intel's low-end product;> Hence the K6-3D and later the K6-3D+, which will be priced at parity to the PII. <K6 production is forced to ramp up because of Intel's stop-production of Socket-7 CPUs> This should read:"Intel is vacating the socket 7 space and giving away the Pentium market share to AMD and Cyrix". <Advertisement on super Socket-7 has to be significant due to this introduction of new product> But no space-suited bunnys though. <In fact, the stock price of AMD today is fueled by the expectation of a take-over, or the break-up of AMD. > AMD is selling at 2x revenues; Intel is selling at 5x. AMD was founded just a few years after Intel, and has gone through even rougher patches before. Why should they be broken up now? <What prompted you to invest in Intel right after the CPU bug? > Because the stock price had been stagnant for some time despite spectacular earnings growth during the same period, and the Pentium bug debacle punished the stock price even further, which I thought was unjustified. Market sentiment was certainly against Intel at that time, which made it a good time to buy. The Pentium had no competition; the K5 was late and weak. <And what made you to think Intel was so ridiculously overvalued when you dumped it?> The rise in the stock price far outpaced the rise in earnings, and the stock was trading at historically record high valuations. (Intel historically has been trading at 12-20x earnings). Earnings are also expected to slow because of margin pressure (Grove did say one year ago that in spite of a 60% gross margin at that time, he expected the long term gross margin model to be 50%). I hope this answers you questions. Adrian