But here's why I see the recent drop in INTC share price as a purchasing opportunity: Microsoft is set to introduce Windows Vista sometime in 2006. With the introduction of Microsoft’s new OS, Intel and AMD should see an increase in demand for new CPUs. Windows Vista posseses the most stringent and difficult hardware requirements of any new OS upgrade that Microsoft has released. The trend is also moving toward dual core processing on the desktop, so while Intel faltered on its first generation of dual core processors, I don’t expect the company to make the same mistake again.
The battle between INTC and AMD reminds me of the GPU battle between NVIDIA (NASDAQ:NVDA) and ATI (ATYT). At a certain point, the share price for both companies rose on demand for new GPUs from a new cycle of game releases and graphics features found in new games. I expect the same thing to occur with INTC and AMD. In response to the new demand cycle triggered by the release of Windows Vista, I see INTC reaching $24.00 in 3-6 months and $26.00 in 6-12 months.
INTC 1-yr chart:
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