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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: A. A. LaFountain III who wrote (60702)	6/7/1999 5:23:00 AM
From: Amy J	Read Replies (2) \| Respond to of 1571931

Tad, RE: "As Intel increasingly focuses on communications activities, it puts semiconductor analysts/[writers]... at a disadvantage" I believe several writers may have missed the point of the acquisition. Since analysts read these reports, maybe this adds to the confusion. RE: "This can lead to what I call the Motorola effect." I believe the reverse could be true in this case. (Also, wasn't MOT's PE significantly higher on lower growth over this period?) Anyway, until analysts "own" this hybrid area, (or, after fact), I believe Intel will be undervalued (which is fine by me.) Unrelated, Intel's culture is not like the Xerox culture, so your Xerox example wouldn't apply. RE: Intel's large size: I agree, but I believe you could re-examine the size of Intel's opportunities. RE: "while the comm analysts saw MOT getting creamed by Nokia, Lucent and Ericsson, but understood that is was one of the largest and most respected semi" The analogy doesn't seem to contain information relevant to Intel. I do not share your implied negative opinion of Intel in the area of communications component provider. RE: "Eventually, the dismal performance was too significant for anyone to ignore and the valuation came back to reality." IMHO Intel's performance will eventually be too significant for anyone to ignore. (Barring economic factors and after the short-term AMD issue.) RE: "I don't see the appeal in Dialogic" Yes, I can see you don't. RE: "downside risk is certainly valid, and I concur with your assessment...of an AMD investment" I'm not sure it's obvious to the general observer... the nature of AMD's long-term risk (and I'll add here) it's potential short-term play. So, mentioning risk is a good idea. RE: "I do believe that risk is greatest when most are willing to ignore it or even believe that it doesn't exist." IMHO In a bull market, the risk is ignoring opportunities (not short-term ones.) In a bear market, risk is an investment on the $ border. RE: "Conversely, risk often is lowest when everyone is focused on problems and dangers." Sounds like you might be describing Intel here. RE: "If AMD hits my target price (now $42), I won't be patting myself on the back (per Paul Engel) - I'll be talking about the increased risk in the shares." And just in time to lower your rating safely back down, after you possibly bear the fruits of this potential short-term issue with AMD, but just before it hits Intel's subsequent waves of releases. Maybe you'll fair out. RE: "patting myself on the back (per PE)" Any visible job has both pats and arrows. I like it when people take a stand, make independent calls (i.e. and would like to see more of this too), and withstand the pressure this inherently creates. But you may want to re-examine your underlying assumptions about Intel. I think they track last year's hiccup (Asian recession, Merced delay which indirectly may have exposed Intel temporarily to shifts in desktop market, not Server) and I think you're very focused on this potential short-term AMD opportunity, not Intel's future opportunities post 1999, like the server market and comms. But maybe your ratings are only 3 months to a year out, which could explain it, but by then, it's too late IMHO. I'd rather buy Intel at this summer's prices etc. (and not miss them) rather than wait until everyone is on the Intel bandwagon by the end of next year. Regards, Amy J

To: A. A. LaFountain III who wrote (60702)	6/7/1999 8:48:00 AM
From: gnuman	Respond to of 1571931

Tad, re: <since it's unlikely that our understanding of the new market matches our understanding of the semiconductor business.> Understanding the semiconductor business implies expertise in the market for semi's. In the past the PC was the dominant market segment for Intel, and this market was well understood. Growth, revenues, market share, prices, costs, margins, etc., were analyzed to death. A number of companies provide in-depth reports on all aspects of this segment, with continuous fine tuning. Yet while the new killer app, (the internet), has created a rapidly growing market for both high-end CPU's, (ie; Xeon), and low end, (ie; StrongArm), I get the sense these segments are not as well understood. Won't these markets have more impact on corporate performance over the next year or two then say, server farms? How large is the market for Xeon based servers, what are the growth rates? How about Set-tops and NIC's, etc.? Which will have the biggest impact on revenues/margins going forward? It's clear the PC side of the business is under price/margin pressure, but can Xeon drive it up, or will the low end pull it down? While it appears Intel is in the process of re-inventing itself, their core business is still semiconductors. How they perform in that business is still key for the investor.