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

To: stak who wrote (65371)	9/24/1998 2:00:00 PM
From: gnuman	Read Replies (2) \| Respond to of 186894

stak, re:<Is another genie about to leave the lamp?> First let me say that I think Intel will be the dominant factor in PC's and Servers for years to come. They've got too much money and manufacturing prowess to lose this dominance. But as I said in June of `97, they're entering a new era. I think the key reason for the change is that the PC makers now have a viable alternate source for the desk-top, (and now mobile), computing segment. I also think Compaq and AMD will impact the server segment with Alpha. The PC suppliers now have pricing leverage in much of the business that they didn't enjoy a year or two ago. I think the result is that Intel's main business is shifting from proprietary to commodity. To me the key indicator is Intel's more frequent and steeper decreases in CPU pricing. The AMD design wins at IBM, Compaq and HP indicate to me that the makers are using this pricing leverage against Intel. If Gateway and/or Dell should also show support it will only get worse. Many of the new chips Intel is introducing appear to be a rehash of existing chips with KNI instructions. This is more of a marketing game, and it remains to be seen what the marketing impact will be. But Intel has the money and smarts to drive this into the market place. I also see Intel entering more of the true commodity businesses with StrongArm and graphics, etc. While this will increase revenues, I wonder what the impact will be on gross margins. Some time ago I predicted Intel will be a $50 Billion company in five years, but with much lower margins. I still believe this. But I also think earnings growth will significantly lag revenue growth. I think Intel has always relied on the high-end devices to fund the rest of the business. To me the key product now is Xeon. A million or more of these devices would more than offset the declining ASP's on the CPU products. I think this is a key product to watch over the coming months. I'm not prepared to do a best case/worse case earnings scenario over the next four quarters. If I make an attempt, I'll send it to you via e-mail. (No one on this thread would believe it anyway). ;-) I will make a prediction for 1999. Revenues = $27 Billion, earnings = $6.0 billion. (About $3.33/share). Of course, these are just my opinions.