Sridhar,
I agree that as yet unforseen advancements will always alter the technological picture. From a stock valuation perspective, however, I look at MU compared with other periods of growth and it's place in the boom/bust cycle. The explosion in semi's is being led by new generations of DSP's,ASIC"s, and other IC's, where most industry leaders still talk of a weak DRAM market (comparitively speaking) through mid 1998. There are many more fabs in existence now which can add volume to the supply side of the equation. Demand will pick up as new generations of memory dependent apps hit the market, but a rational person must look at risk/reward in this stock price.
What if the Y2K problem cuts into new equipment expenditures for businesses? As this is over 70% of the PC market, it's impact would be enormous. How does this very real possibility jibe with the idea that memory demand will go through the roof to use your phrase?
Until the PC is as easy to use as a TV, the explosion in consumer demand will be hard to produce. This is the same population where a majority of people can't program the time on their VCR. Plug n Play ease is not a reality yet, but may be at some future point as thin client systems develop. I don't want to rehash all the configuration headaches I experienced when I first bought my current PC.
I am not a perpetual MU basher or TK hater for that matter (as others may insinuate in their own uselessly moronic way). I find their business sensibilities to be quite good considering the difficulties they face. This newfound respect is evident in all of my recent posts. I do question the trading sustainability of the momentum crowd, but if the idea is to be making money in the current environment, than a bullish price inclination is necessary regardless of fundamental overvaluation.
Again, there seem to be plenty of obstacles in the way of a DRAM boom like you forsee. Perhaps the market is telling us your view will prevail...but watch out for those snakes in the grass!
Cheers,
Peter Shaw |
