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

To: Paul Engel who wrote (65514)	9/27/1998 5:13:00 AM
From: puborectalis	Read Replies (2) \| Respond to of 186894

Paul,here's what TK had to say.Intel has flat sales for 1998 because:1)PentiumII prices are down sharply making it the first processor not to drive growth.2)profits are falling much faster than sales due to the sensitivity of margins to prices.Gross margin fell by 20% since PentiumII.3)low priced pcs share of market could reach 40-60%in 2-5 yrs.4)new Celeron chips priced below ASP of $200. In a nutshell ..with ASP falling and total pc unit growth slowing, INTC is pressed to hold its current revenues of pc processors in the future. TK predicts revenues up only 9% not 30% as it has in the last 10 yrs due to low price chips getting even cheaper. He sees a further drop of 33% in ASP. He says income is down 22% from last year and sales have staleed for 8 qtrs. In summary he feels that INTC is "generously priced" based on estimated sales growth of 9%. INTC rating:Neutral for intermediate to long term.........Paul what do \you think about his logic or illogic?