Joe Osha Intel Quotations

We believe that Intel will be forced to respond competitively to AMD in the coming year, which may put more pressure on Intel's pricing than we had expected.

We believe that Intel had largely completed shipping its quarter prior to Sept. 11.

Given the challenges Intel faces currently with its business model, we think the stock needs to trade on a lower multiple of 2003 earnings to be attractive.

We suspect that Intel will, at some point, respond with aggressive pricing rather than allow AMD to continue to build market presence.

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

We continue to believe Intel will apply competitive pressure to AMD in the desktop and mobile markets in an effort to blunt further shares gains, even if the result is negative for Intel's own profitability in 2006.

The reason I am positive on the stock right now is the fact they are pushing into servers, workstations -- the things that are being driven by growth in the Internet. That is a big market that Intel can dominate, I think, pretty quickly.

At 27 times our 2003 earnings estimate Intel is still expensive relative to its growth prospects and its own history.

The semiconductor sector in general is in very good shape; the industry hasn't invested enough in capacity and that is actually very good for chip makers. Intel is often treated as a proxy for the chip sector, so the chip sector is doing well and so is Intel.

Despite our conservative remarks on margin compression and pricing intensity, we continue to believe Intel will meet our revenue forecast and reiterate our intermediate-term neutral and long-term accumulate rating.

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.

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.