Just a couple of points:
1. If there is such a thing as a slam dunk, AMD's lawsuit is just that from my vantage point. Any settlement in this lawsuit will likely mitigate greatly any Fab 36 costing concerns that any have, assuming, of course, that any such costing concerns are grounds for concern. But in the off chance that a healthy settlement isn't granted by the court, then I'm guessing that, given the marketshare growth phase that AMD has now entered (and for very good reason, being, superior product) the 20% to 25% operating profit will be more than ample to cover off even the most inflated Fab 36 cost estimates that one can conjure up...and then achieve $2.00 eps in 2006, without a 30% marketshare.
2. Intel's monopoly pricing model can only be smashed by either court action or by non-INTC (primarily AMD) marketshare rising to 30% or more. Interestingly, even with the HUGE aid provided to IMTC by their monopoly pricing model, AMD, owing to a superior roadmap, has now entered a phase of increasing MS gains and increasing ASP's. Obviously these opposing forces (INTC monopolistic pricing model and AMD MS and ASP gains) is an unstable phase. Something has to give.
From my vantage point, and a growing body of analysts I see, it is the INTC monopolistic pricing model that is now the more vulnerable and once punctured, could well result in years and years of a much, much weaker INTC, both real and perceived.
Oh, with your outlook, are you long INTC and short AMD at the current price levels, 'cause that's another test as to how firmly you stand behind your current outlook.
(To be fair, I'm not only long AMD, but remain aggressively invested in calls, as my pricing model is looking for key price points of $45, $48.50 and $60 by the end of July as the current AMD momentum builds...and my price model is not predicated on 30% marketshare and does include costing for Fab 36) |
