SAN FRANCISCO -- Intel's (INTC) - Get Report history tends to repeat itself. Last January, when the stock was trading at an all-time high, analysts fell over themselves raising their price targets and upgrading their ratings. Now that it's at a new record high, they're doing it again.

PaineWebber

analyst John Lazlo Wednesday raised his share-price target to 95 from 80. (Intel closed Thursday at 75 15/16, after brushing against an all-time high of 76 3/4 midday.) On Aug. 5,

Salomon Smith Barney

analyst Jon Joseph raised his target to 95 from 85 after raising it from 73 on July 14. On July 6,

Merrill Lynch's

Joseph Osha upgraded his near-term rating from accumulate to buy.

Even

SG Cowen's

Drew Peck, one of the most respected of chip analysts, got into the act with an upgrade to buy from neutral on July 27, something he hasn't done in several years. Now, after a year of taking flack for his unfashionably bearish call on Intel, Peck is suddenly the longstanding "ax," at least according to

Wall Street Review's

Mike Green. (PaineWebber, Salomon, Merrill and Cowen have no underwriting relationship with Intel.)

This time analysts are scrambling to upgrade Intel in time for an anticipated seasonal upswing, but their bullish reports are peppered with caveats and question marks about Y2K, competition from

Advanced Micro Devices'

(AMD) - Get Report

Athlon chip, and the hard-to-predict popularity of "free PCs." Meanwhile, long-term concerns -- the slow growth of the PC market, dropping chip prices and declining margins -- still linger.

There is a general expectation that Intel stock rises in the fall with back-to-school and holiday sales, and then drops off after New Year's. Still, something always seems to throw off the patterns, helping Wall Street's chip analysts justify their jobs. In 1994, a Pentium bug crashed Intel's Christmas sales. In 1995, a chip glut sent the industry into a slump. In 1996, AMD failed to produce its K5 chip and gave Intel a competition-free year. And in late 1997, the Asian economic crisis pulled down Intel stock.

Still, a summer upgrade of Intel is the safest play, says

Fahnestock & Co.

analyst Dan Scovel, who has had a hold rating on Intel for over a year and says he's not about to change that now. Fahnestock is not an underwriter of Intel.

Compared to corporate sales, consumer sales now account for a much bigger chunk of the overall microprocessor market than they did in the past, Scovel says, and that has sharpened the seasonal swing for back-to-school and Christmas. Raising estimates now, he says, is a way of protecting one's ass -- something that is likely on many analysts' minds these days. Who can forget the fall of former ax, Thomas Kurlak, a respected

Merrill Lynch

analyst until he ran for

cover to hedge fund

Tiger Management

in February after he failed to spot Intel's rise in time for his clients to score.

Beyond the expected seasonal upswing, the bullish factors cited by analysts seem uncertain. Peck based his upgrade in large part on booming sales of free PCs. "We are now betting that 'free' PCs will boost Celeron sales by an additional 6 million units in 2H99," Peck wrote. The thinking is that free PCs will boost demand for chips. But Peck hedges his comments: "Whether that actually happens depends largely on the ability of ISPs to continue to subsidize the PC business."

Niles and Scovel both believe there's a good chance chip prices can come down more, particularly if the Athlon, now supported by such top-tier companies as

IBM

(IBM) - Get Report

, gives Pentium III a run for its money. Declining prices could lower margins and disappoint investors.

Even consistently bullish analyst Mark Edelstone of

Morgan Stanley Dean Witter

, deemed the Intel ax by

TheStreet.com

last

November, warns investors that the chipmaker doesn't have much more room to grow gross margins this year above the 58.9% it reported for the second quarter. "Intel's all-time gross margin high of 64.5% was reached in the first quarter of 1993, and we believe it will be difficult to reach that level again unless AMD's Athlon product cycle is a complete bust," he wrote last month. Morgan Stanley is an underwriter of Intel.

Moreover, expectations of booming school and Christmas computer sales may already be in the stock. It has risen 50% since bottoming June 1. At Intel's current price, shares are less than $5 off Edelstone's $80 price target set July 14.

Regardless of a boom or bust this season, Intel's long term remains murky. "The seasonal impact is only good for the season," Scovel says.

The bottom line: PCs are growing at a maximum 15% a year in units and severe price erosion continues to undercut profits. The bulls are counting too much on Intel's continued ability to cut manufacturing costs to boost margins, Scovel says. "Soon you can't squeeze your organization anymore and at some point the bubble breaks and things start to fall apart."

Even Peck hasn't changed his outlook past December. "All of the issues that we have raised in the past, especially the technological issues that are constraining processor sales and pricing, remain," Peck wrote. And he emphasized that the estimates will only rise for Intel in the short term.

Greg Mischou, an analyst at

Warburg Dillon Read

who has a buy rating on the stock and who recently lowered his year-end earnings estimates, acknowledges that predicting Intel's performance past the third quarter is difficult. "It's hard to figure out how the fourth quarter will be," he says. (WDR has no underwriting relationship with Intel.)