Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: REH who wrote (13658)	1/15/1999 3:23:00 PM
From: REH	Read Replies (1) \| Respond to of 93625

From the SG Cowen report: Earnings are expected to be flat for next two or three quarters. In contrast to our expectations of a penny increase in the next couple of quarters, management indicated that several factors would keep EPS more flattish. Those factors include: a seasonal slowing in royalties from Nitendo 64 game shipments, fallout in royalties from Cirrus and Chromatics as they exit the PC graphics and multimedia business, and lastly the increased level of spending for R&D as Rambus deploys additional resources to help its customers finanlize their designs. Quite frankly, the only one new news here is the additional R&D expenditures - which we view as a net positive because it is merely an indication of the overwhelming support in adopting/accelerating the Rambus standard. While we had to trip our 1999 estimates a bit, the reason to buy Rambus has nothing to do with the near term earnings outlook but based on the belief thar Rambus will be the defacto memory standard in the DRAM industry and that a highly profitable hockey stick ramp will commence in 2000 and accelerate in 2001 The hockey stick ramp remains on track for calendar 2000. Investment in Rambus should be based on the belief that its DRAM architecture will be used by the PC industry for mainstream computers. We believe that will be the case based on the strong outward backing from Intel and the fact that virtually every major DRAM manufacturer has licenced the Rambus technology. The variable in our opinion is not if Rambus will be successful but when the hockey stick ramp begins for RDRAMs. That will ultimately be timed with the introduction of INTC's Camino chip-set which is scheduled for shipment sometime in 2H99 with volume production shortly after. Further out, we envision Rambus DRAM being used in virtually all mainstream PCs - sometime in late 2000 and into 2001 - at which point the earnings from royalty revenues could be staggering. That is the reason to invest in Rambus and the basis for our Buy (2) rating. reh