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

To: Paul Engel who wrote (55668)	5/16/1998 1:34:00 PM
From: kolo55	Read Replies (4) \| Respond to of 186894

I agree that AMD and NSM are losing money. You wrote:You should be wishing luck to Cyrix's parent NSM - They are the company that just announced guaranteed LOSSES in the next two quarters. By the way - wish some luck to the manufacturer of your CPU as well (AMD) - they have lost money in 3 straight quarters - and are heading for four in a row! NSM and AMD are losing money, but why should this comfort you? That is part of the problem, they are modifying and expanding their business models to let other companies that own fabs to manufacture MPUs, and are seeking to take market share. They have lined up enough fab capacity to take 20 points off Intel's unit market share by mid-99. This is worrisome. Intel hasn't seen competitors with the manufacturing position to grab this much market share in a long time. And the markets they are targeting, the low and mid-tier markets, are susceptible to this attack based on price/performance. Just because they are losing money, and their stock prices are dropping, doesn't mean that Intel's earnings will grow, and Intel's stock price will rise. A market glut will hurt all market participants. I wish NSM and AMD shareholders luck too, they'll need it as much or more than Intel. Its just I'm not sure just who is the low cost producer. But for a while, it really doesn't matter. AMD and NSM will be fighting for survival, and will slash prices as much as they need to take market share. I had hoped we might have more rational price environment, but the outsourcing moves are clearly leading to a market glut. Everyone in the sector will get hurt. Finally, I should add that Intel stock is at the same price it was 12 months ago. So Intel has underperformed the S&P index by about 40% over that time. This doesn't seem like a compelling investment return to me. Paul