How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 486.98

-1.4%

Nov 19 3:59 PM EST

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To: codawg who wrote (26778)	7/20/1999 2:20:00 AM
From: ed	Read Replies (1) of 74651

Well, Mr. SF , how many shares do you long on Q ? If Intel said the second half will be better, then , there is no reason that MSFT will not be better. You know the more volume shipped, the higher profit margin will be for Microsoft. Because the cost of R&D, marketing is fixed for MSFT, up to a certain volume, the additional copies sold for Microsoft will be counted as pure profit. That is the model for software business. The more you sell, the higher the profit margin, that is why Microsoft had a blow out revenue growth together with blow out profit growth. This model did not fit the box business, higher revenue does not necessary mean higher profit margin, and the profit margin can sometimes be negative with higher revenue. Look at CPQ is a good example !!!!

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