Joe Osha Company Quotations

Just because Intel has faltered does not mean the company is now incapable of executing.

In posting the weakest Q4 revenue result and Q1 outlook since the bursting of the bubble, Intel has made it clear how much competitive ground the company has lost to AMD. The extent of the losses has exceeded our expectations.

Valuation for the stock appears significantly high for a company with a sustainable earnings growth rate of 10 percent to 15 percent. We have difficulty imagining any second-half recovery that could raise earnings, and investor expectations, to a level sufficient to keep the stock moving up.

We think that the most interesting potential for National lies in the wireless market, where the company has the potential to substantially increase its revenue per phone.

Although the company is executing in terms of cost control, we think margin contractions at the gross margin level will continue through the second quarter as well, which we had not factored in.

For now, we're staying with the neutral intermediate-term rating on AMD's stock until we see how the company weathers the Northwood launch. We are still long-term strong buyers of the stock -- even if AMD suffers at the hands of Northwood it will not plunge as deeply into loss as it has during past Intel offensives.