Joe Osha
Joe Osha
bit business capacity case correction declare demand focus growing investment percent pricing quite relationship revenue scare seen slightly spending stocks summer though time visibility wireless
We've seen investment in capacity go up quite a bit and we had a scare this summer with wireless. So you can make a case that the business is in trouble. We try to focus on slightly longer-term fundamentals. The relationship between spending and revenue in this business is still reasonable. Visibility is still good. Pricing is good. Let's not forget, wireless handset demand is growing 50 percent over year-on-year. So with stocks down a bit and the fundamentals still solid, we though it was time to declare the mid-cycle correction over.
advise beginning below buying concerns correction globally investors march stocks thesis
The concerns that underpinned our mid-cycle correction thesis are beginning to dissipate, and semiconductor stocks globally are well below their March highs. We would advise investors to begin buying semiconductors more aggressively.
company incapable intel mean
Just because Intel has faltered does not mean the company is now incapable of executing.
believe continue cycle internet investment second year
We continue to believe that we are in the second year of a 5- to 7-year investment cycle in Internet infrastructure.
apply believe blunt continue desktop effort further intel markets mobile negative pressure result shares
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.
consumer discrete graphics holidays processing push sales selling suffer unit
Without the consumer Vista push for the 2006 holidays selling season, we think that discrete graphics processing unit sales could suffer slightly.
estimates march points raising strength
We're not raising our estimates for the March quarter, but the strength at Motorola points to the possibility of upside.
added although capacity change companies fourth happening less negative past rate terms themselves worst
What we see happening is a bottoming to the rate of change in the semiconductor business, which has been negative and less capacity being added by the fourth quarter, which is also good. So, although companies themselves are still very conservative we think that the worst is past in terms of the downturn here.
adjustment expect fact gains given impact low market negatively next numbers product share stock surprised
We are not too surprised by AMD's announcement and do not expect the adjustment to numbers to impact the stock negatively at this point. Given the fact that AMD's product lineup at the low end of the market is more competitive than Intel's, we expect to see market share gains in the first part of next year.
appears company difficulty earnings growth high imagining investor level moving percent raise rate recovery stock sufficient
Valuation for the stock appears significantly high for a company with a sustainable earnings growth rate of 10 percent to 15 percent. We have difficulty imagining any second-half recovery that could raise earnings, and investor expectations, to a level sufficient to keep the stock moving up.
investors love
We'd love to tell investors that we anticipated Intel's problems, but we did not.
both business decline dramatic flash leaving memory overall pick quarter rate second top
The rate of decline for both the flash memory and communications business in the second quarter could be more dramatic than the overall top line, leaving it to the microprocessor business to pick up the slack.
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We wrote last November that Sony's design choices for the PS3 had resulted in an expensive and difficult-to-manufacture product, and we think that we're seeing the consequences of those choices play out now.
believe coming forced intel pressure pricing respond
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.