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

To: Tenchusatsu who wrote (66965)	10/18/1998 1:22:00 AM
From: Fred Fahmy	Read Replies (2) \| Respond to of 186894

< but I also believe that the worst is behind AMD now.> I wish I could tell you that this is the first time I have heard that, but it's only one of many times. The last time I heard strong predictions that the worst was behind AMD was when they showed profits for two quarters in a row (first two quarters of 1997). I also heard it at the beginning of 1996. 96Q1 0.18 96Q2 -0.26 96Q3 -0.28 96Q4 -0.15 97Q1 0.09 97Q2 0.07 97Q3 -0.22 97Q4 -0.09 98Q1 -0.39 98Q2 -0.45 98Q3 0.01 You can see what happened in the 4 quarters which followed 97Q2 and in the 3 quarters which followed 96Q1. I don't think that the worse is over for AMD by a long shot. Celeron is going to continue attacking their bread and butter (i.e. the commodity end of the CPU business) product and pricing pressures are going to continue. I think we are simply repeating a cycle I outlined a couple years ago with respect to Cyrix and AMD. Step 1. They spend tons of resources they can hardly afford developing a chip to catch up with Intel's latest chip. Step 2. They stuff the channel with their latest chip(s) and show a profit for one or two quarters. Step 3. Inventory builds up in the channel as their current chip stops selling through. Step 4. Earnings drop right when they need more resources to begin with Step 1 again. This is the cycle that has led to many ups and downs over more than a decade. In the end, after all the cycles, the stock sits at about where it was when AMD first went public more than 10 years ago. I see the cycle repeating. Their last chip sold well enough to make a slight profit this quarter, but now Intel has a new Celeron which is displacing AMD's main chips. AMD is now scrambling to catch Xeon so they can get a piece of the server market. By the time they catch up, the industry will be firmly behind Merced. I have nothing against AMD. I would like to seem them survive. I think competition is good for the industry, good for the consumer, and good for Intel's own development. I just happen to believe that it is an incredibly poorly managed company with decent products and no strategy for sustained profitability. I don't think this will ever change until Jerry is ousted. FF