It's a tough question. SUNW is fairly rich by historical standards, looking backward. However, there are some things going on that are very hard to value, and require some degree of prophecy. For example:
a) Sun reportedly has been having discussions in China and elsewhere worldwide, introducing the possibility of whole new markets;
b) The UltraSPARC III should appear fairly soon, and could spur sales;
c) Solaris 8 should ship fairly soon, and could spur sales;
d) Ubiquitous computing with Internet access devices other than PC's seems to be arriving in a big way (and requires servers);
e) The competition seems to be falling away (both Unix and Wintel);
f) Consumer E-commerce may be taking hold, and business-to-business almost certainly is;
g) The world's economy seems to be recovering;
h) Y2K will soon be behind us, thus resolving that uncertainty;
i) The market has been good enough this year that I don't expect huge amounts of tax-loss selling, and much of what will occur may already be behind us;
j) Sun has announced they're increasing StarFire build capacity;
k) There are rumors that Sun is running ahead of plan for the quarter.
There are probably others, but these come quickly to mind. Each could contribute to or help to maintain SUNW's value; I believe a few of them have the potential to make SUNW at current levels look dirt cheap.
Sun's market cap is still small compared to some of its peers, and I think it could continue its run. Nothing is certain, though! A pause at some point wouldn't surprise me.
Besides, nobody got a hole-in-one the other day, so Sun didn't have to ante up the million bucks!
JMHO, and not investment advice. Do your own research and form your own conclusions. |
