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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: Glenn who wrote (6615)	1/10/1999 6:03:00 PM
From: TH	Read Replies (2) \| Respond to of 90042

Some thoughts on AMD. I agree with Tim that AMD might be a nice position play this week. I see two ways to play it. The first is to go with the strong movement in the chip sector and buy on Monday so you can capture any run-up before earnings on the 13th. This will yield the best gain, but if Intel surprise the street, or is not optimistic about the next few quarters, then we could see a pull-back in the chip sector. Unfortunately, AMD's price is linked with Intel at this time. Everything I have read would indicate that both Intel and AMD have very good quarters. The second way to play it is to just wait until earnings are out for Intel and then ride the wave that will start in the chip sector, provided they have some nice forward looking statements. This method also will provide a small window into how AMD has done as Intel may indicate if the Celron chip was successful in gaining back some of the sub $1000 pc market they lost to AMD last quarter. If they do not mention anything about this segment of the market I will assume that AMD is still making inroads and will report good numbers. Remember, AMD surprised the steet last quarter by a huge amount. I am expecting the same this quarter, but not by nearly as large a percentage. If the entire sector is hot, and both Intel and AMD report good earnings, then $35 for AMD might be very possible. The AMD thread at SI offers a lot more specific information, and I suggest you do some DD there. A lot of people it seems are either Coke or Pepsi only. I think there is room for both and AMD will benefit from strength from Intel as long as that strength is not based in revenues from the sub 1000 segment. One of the strongest con positions last quarter was that AMD could not actually produce the K6-2 at the high speeds and meet production projections. I would guess that based on the fill of their product in the marketplace that this was an unjustified concern. A more valid concern might be if the profit on each of those chips is sufficient to yield a good return for the shareholders. AMD and Intel have dropped chip prices in this segment several times in the last few months. One of AMD key chips the K6-2 350 was lower again just in the last week to about $130. Some have speculated that this is to make way for the new higher speed chips at prices over $200 each. Intel has also lowered prices on the Celron recently. This is the single largest concern I have with AMD meeting or beating the numbers. I don't think anyone really knows the answer, but I am going to bet that AMD did make a nice return and will report that on the 13th. Now for some DD done at my local computer stores and from a discussion with a friend who does repairs. My friend is convinced that AMD has a solid chip with the K6 as the number of repairs he does on these units is very low. He says he gets a lot more Intel product, but then Intel is still selling a whole lot more chips (about 4 to 5 times more in an average quarter. Note: this is after AMD started producing a winning chip, this factor used to be about 10-25 times more chips, which is also a bullish indication for AMD and their growth in the market). This weekend I visited 7 computer stores in the Detroit area and asked about AMD sales. Everyone I spoke to said that sales have been very brisk, but not just for AMD. Sales of Intel product has also been very strong, and Cyrix is also pickup up some steam with the MII. I hope this helps and good luck. matt