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

To: Mary Cluney who wrote (55640)	5/15/1998 6:33:00 PM
From: Diamond Jim	Respond to of 186894

Is Kurlak saying that Intel guidance is not to be believed and that he has better information to form his opinion? =================== Mary, unfortunately, that's exactly what TK is saying, and saying, and saying. He's like that energizer bunny rabbit commercial<G>. I hope he's wrong and I am talking with my wallet, I got some more today at 80. jim

To: Mary Cluney who wrote (55640)	5/15/1998 6:57:00 PM
From: kolo55	Read Replies (2) \| Respond to of 186894

Well their forecast for sub-zero PC sales was wrong. You wrote: Is Kurlak saying that Intel management is lying when it says it will maintain 50%ish margins? Are they lying when they say demand will pick up in the 2H 98? Is Kurlak saying that Intel guidance is not to be believed and that he has better information to form his opinion? Last year they didn't think the sub-zero PC market would amount to much. They're fallible. Also Intel admitted that LT the margin could bounce around between 40s and 60s, but would average 50% over the long haul. Whose to say that the next two years aren't years that the company will be seeing 40% types of gross margins? Don't get in an uproar, but there are lots of reasons why competitors would move in on Intel's market, even losing money over a long period of time. What people on this thread have never realized, is that all the stocks of the MPU producers really should go up and down together. I guess some of you are starting to realize that. This whole sector could be about to undergo a gut-wrenching change to a higher volume low price lower margin environment. Intel didn't even see the shift of 25% of the market to the sub-zero PC, so they obviously haven't been accurate in forecasting this trend. Finally, you ignored my biggest point: for the first time in at least 10 years, competitors will be in a position to produce and supply over 30% of the market (in terms of units, not revenues). In the past Intel made huge profits as they milked their older chip designs and sold to the lower tier market. This is over now. Finally Intel's accounting leaves out a significant employment cost, the 'cost' of the options they have been handing out. Their real costs are much higher than the costs published on their P&L. Up to now, these costs haven't been evident due to the strong growth and high margins. But now in a flat revenue environment, the impact of these costs will eat into earnings. Just wait until you hear them reprice their employee options after several years of flat revenue growth. All I'm saying, is there are good reasons for this stock to trade at discounted PE to the market, given the risks in the MPU sector. Paul

To: Mary Cluney who wrote (55640)	5/15/1998 10:27:00 PM
From: Francis Chow	Read Replies (1) \| Respond to of 186894

<Where did you read this? Intel has reiterated for the last two or three quarters that their margins will be 50%ish going forward.> Mary I have to agree with Paul. My last news post featured a 200 MHz Pentium MMX for %599. There's no room in a $599 box for a $100 markup on the CPU - there just isn't. Furthermore, a 200 MHz Pentium MMX is the machine I have at work; and I work for a major player in Business Intelligence Software. Sure, as a developer I would like a faster machine, but my boss won't get me one, because he doesn't think I need it. I would like to jump up and down and claim that my boss is being unreasonable, but I really can't - the main bottleneck is not the CPU anyway. For a little more than $1 per meg, I could double or quadruple my main memory and halve my compile times. That's cost effective.

To: Mary Cluney who wrote (55640)	5/16/1998 5:58:00 PM
From: Srini	Respond to of 186894

Mary: Re: "Is Kurlak saying that Intel management is lying when it says it will maintain 50%ish margins? Are they lying when they say demand will pick up in the 2H 98? Is Kurlak saying that Intel guidance is not to be believed and that he has better information to form his opinion?" Take this for what it is worth since there is no way to verify it. Michael Murphy (Cal. Tech. Stock Letter) said in his phone "hotline" report a while ago that, following the CC after the last earnings announcement, Kurlak was actually heard to mutter "They (Intel) are full of BS". Srini.