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

To: Mary Cluney who wrote (73733)	2/16/1999 2:00:00 PM
From: Michael Bakunin	Respond to of 186894

Not a peak in sales, but a peak in the slope of the growth curve. Intel's trading at over 25x 1999 estimates. If processor sales growth (in $) slows to 15% -- no peak, still well above GDP growth -- the multiple will come in. The SIA itself is only predicting 9% next year: eb-mag.com As the article is quick to note, accuracy of these forecasts can be pretty weak: "We now know that total worldwide semiconductor sales declined by something on the order of 10.9% last year. What did the SIA forecast published in the fall of 1995 see in the cards for 1998? Growth of 17.1%." Let's look at the most recent data: eb-mag.com "Microprocessor sales last November were 14.1% above the November 1997 level. Through the first eleven months of 1998, the dollar value of microprocessor sales had successfully defied the overall downward trend in the semiconductor market and increased by a solid 4.0%." In light of the numbers, I think I'm being generous when I estimate a long-term 15% sales growth rate for Intel. But nobody can see through time; I'll be almost as happy as you if sales growth runs at 25% for the next ten years, because it'll indicate a strong economy, which floats all boats. After all, I have a day job. mb

To: Mary Cluney who wrote (73733)	2/16/1999 3:25:00 PM
From: Amy J	Read Replies (1) \| Respond to of 186894

Re: "market plateau" Michael, even in a market plateau or your 15% figure, consider how Intel is taking existing markets away from others who fumble... - Network gear: Intel went from $0B to $2B in 1-2 years from ground zero (Absolutely amazing) - Merced targets new markets (new to Intel) - AMD meltdown Also consider new and expanding markets: - Merced deployment - VC Investments: Inktomi (from UCB) with a 10X return, etc. - Y2K replacement PCs - Fueling Ecommerce growth with ecommerce servers - Consumer/Corp Internet & website growth continues, expands overseas - Continued expansion of Network card biz - Future VS, VOD, interactive Internet broadcasting growth to fuel PC growth - MC removes the barrior to videoconferencing market expansion - Int'l recovery My suggestion: get in now, before Merced ships. When Intel's stock moves, it tends to move quickly. "200 in 2000" are nice even numbers and the phrase sounds lovely. Amy J p.s. So you got $146? I thought the formula would have outputted $150 or $155. Thanks for running the numbers. I wouldn't focus too much on SIA figures - it may possibly be dragging down the estimate of a single good company with accumulated estimates from the bad companies (i.e. the ones going through hard times; the ones in different/wrong product mixes.) Also, it doesn't appear to include the growth driven by the other factors mentioned.