Replies to post #65994 on Intel Corp (INTC)

[jay1000]

Sarmad,

Thanks ...
it seems you are basically inactive presently...
Just waitng..

<".... I would be swinging from side to side like a willow in the wind....">
Careful now, you are begining to sound like one of our Presedential candidates ....the 'ONE' who will soon heal our planet, and make our oceans (and the economy), recede ... )

[Professor MD]

Dear Sarmad. Re: The only other stock I have is Seagate, and that has been a disappointment and a bad investment so far. But adhering to the fundamentalist persuasion, I have hopes it too will get to 25 within a year or two. Until then I'm just idling and paying margin interest.

I am also a margin paying long-term investor of the fundamentalist persuasion. I do not like Seagate. The swirling, unreliable, energy guzzling Hard Drive is destined for extinction. The dawn of the Phase Change Memory (PCM) is upon us. Please wake up.

[Saturn V]

The fundamentals are looking brighter. Intel looks poised to increase its market share and also grow into newer markets with Atom and Larabee. But given the size of Intel even the runaway sucess of new products will only have a modest impact on overall profits. The stock price is also a function of the overall market psychology.

The macroeconomic situation is also getting better. The runaway Oil has been reined in for a while. We will have to see the actual economic statistics to see the impact of the twin shocks of the mortgage meltdown and increased oil prices. So the seeds of a market recovery may have been planted, but we will have to wait until the Bear Mentality is licked. We are clearly in a Bear Market, but the present rally may not signal the end of the Bear. The end of a Bear Market is normally signalled by an explosive jump in volume with a sharp run up. That has not happened although there are encouraging signs that the market is listening to good news.

Intel is executing very well and it may continue to outperform the market for a while. It may even go past the $25 level of a few months ago, but not for long unless the rest of the market also follows. But Intel is definitely a $30+ stock once the market doldrums are behind us by next year.

[Saturn V]

I like the good professor do not like the Disk Drive business either. It is basically a commodity business, with several players and razor thin margins.

In addition the technical threat from Sold State Memory may lead to a gradual shrinking of the market place. NAND is more cost effective for Lowend Nettops with small disk memory. Servers will also suffer attrition since Solid State NAND memory dissipate far less power and provide higher performance. Intel is championing NAND for this reason. Google is rumored to be considering a switch to SSD based data centers. Long term Intel may not stay in the commodity business like NAND, but irrespective, the trend does not bode well for disk drive makers.

I am not sure about PCM either. It is very hard for a new technology to quickly break into the fast moving, high competitive and cutthroat memory market. PCM will have an uphill fight with two tigers of NAND and hard disk makers.