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Intel, 3DFX, NewsEdge and Plantronics


Adam Lashinsky


San Jose Mercury News

columnist Adam Lashinsky finds analysts downbeat on prospects for makers of PCs and components,


(INTC) - Get Report

in particular. But there may be hidden upside if you look at the company as a venture-capital firm.

Intel has dozens of equity investments in the $5 million to $10 million range. Intel made more than $300 million in investments in more than 100 companies last year, according to

Morgan Stanley Dean Witter

analyst Mark Edelstone. Intel says its portfolio is worth about $500 million, but Edelstone puts its value at $750 million, reports Lashinsky.

But it could be worth more. Two-thirds of the companies in the portfolio are privately held, "and we suspect a public or more current valuation of the portfolio would provide a higher underlying value," says Edelstone.

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One chip company bucking the bearish trend is



, maker of high-end graphics chips for hardcore gamers. 3DFX's Voodoo chip, which improves the speed and presentation of a game's graphics and video, is so popular it is the focus of 55 newsgroups and more than 100 Web sites. Game publishers such as

Electronic Arts

even brand their products with a 3DFX logo to reassure their customers.

The latest version of the Voodoo chip is at least four times faster than its nearest competitor, and a new, faster version will be introduced next year. 3DFX also plans to introduce a low-end graphics chip, dubbed Banshee, targeted at the sub-$1,000 PC market.

3DFX has sold one million Voodoo chips so far this year, compared to 1.22 million Voodoo chips sold in all of 1997. Earnings for the first quarter of 1998 were 50 cents, double analysts' expectations. Second-quarter revenues could be up 15% to 20% over first-quarter revenues of $50 million.

Fidelity Contra Fund

bought 13% of the company on April 10.

"They are so good there is no one even close to them right now," says analyst Peter Glaskowsky of

The Microprocessor Report


does sound one note of caution, noting that the speed of graphics chips increases eight times faster than that of PC processor chips due to the competition in the field. "One of these could come up with a better chip and spoil the party."

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TST Recommends


Steve Harmon




, the company formed by the February merger of

Desktop Data


Individual Inc.

, is a "sleeper" that is showing new signs of life, says Internet stock analyst Steve Harmon.

The company packages and sells news content into the corporate and Internet markets. It has more than 600 corporate customers. "While many Internet-content firms hype the personalization goal, NewsEdge has been doing this longer than most," says Harmon. The company has one million paid or authorized users of its various services.

NewsEdge's pro-forma 1997 revenues of $77.5 million surpass competitors




. First-quarter revenues, announced Thursday, were $19.7 million, up from $18.5 million a year ago. Harmon forecasts revenues of $90 million for all of 1998. Profits, he says, will come next year.

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Stephen Quickel



(PLT) - Get Report

is the world's largest maker of lightweight communications headsets. The company had $195.3 million in 1997 revenues, selling mainly to call centers for long-distance carriers and private telemarketers.

The company is not widely followed by analysts, leading

US Investment Report's

Stephen Quickel to recommend it as a "sleeper."


lists only one analyst who covers the company -- and he rates it a strong buy. At 40, the stock sells for only 16 times projected 1999 earnings.

Plantronics recently entered the consumer market with a line of headsets for cellular, PCS and cordless phones. During a record fourth quarter, earnings were up 21% over the year-ago period. A stock buyback was announced in January. "We believe Plantronics can grow at 15% to 20% a year," says Quickel.

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