Triple whamo, IMTO, first a general decline in chips sales, stiffer competition from AMD, and reduction in margins (these are historically low, amongst other things, because depreciation rates have declined with INTC restraining capex (note the decline from B$6.47, for 01 to B $5.07 in 2003 and to $4.81 in 2004). With INTC picking back its capex to the $5 B plus range, depreciation is going to mount back and the 56% margins may not be sustainable. That with a market that is going to contract PE and a possible downturn in earnings late next year (getting for all of 2005, maybe 1.10 rather than $1.25 the market think INTC will get), would, at the extreme of under pricing the stock get us possibly to the 12/$13 range, mind you that is the max downside I see.
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