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Technology Stocks : Intel Corporation (INTC)

INTC 36.15

-0.6%

Dec 24 12:59 PM EST

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To: Mary Cluney who wrote (42009)	12/11/1997 6:14:00 PM
From: Joey Smith	of 186894

re:What am I missing? Software companies tend to have higher PEs than hardware companies, and there could be many reasons for this: 1). the "switching costs" of software are higher than hardware, which makes them less risky. In other words, it is more difficult for a user to switch application programs than to switch the machine it is running on. 2). Software companies tend to have more "intangible" assets (e.g. programmers, the software) which are more valuable (or scarce) than physical ssets, like machinery and equipment. 3). higher sunk costs with hardware than software companies. I don't necessarily agree, but these have been commonly cited as reasons why a Microsoft has a much higher PE than an IBM. joey

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