Replies to post #875 on Intel Corp (INTC)

[spokeshave]

greg s: Re: "For the long-term, I do believe that Intel is positioned to be one of the winners."

You may be right, but that may not be the case if the markets return to more traditional valuations. Intel is still trading at 30 times trailing earnings. That is quite a premium over its pre-bubble average of about 15. Now, I recognize that current trailing earnings are somewhat depressed, but forward visibility is still not good, and there is at least some informed doubt that the PC market will ever resume its former growth rates. There is also growing evidence that CPUs are becoming commodities and that ASPs will never return to previous levels.

Having said that, I doubt that Intel will ever trade at 15 times earnings again. They have earned a premium as an industry leader. The real question is what premium will the market allow. Currently, that premium is a P/E of 30, but that has been steadily dwindling. I suspect that it will settle around 20 to 25.