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Technology Stocks : All About Sun Microsystems

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To: SteveC who wrote (25798)	1/5/2000 7:54:00 PM
From: E_K_S	Read Replies (1) of 64865

Hi Steve: It appears that IBM has been forced to play their hand and work with the alliance to develop deliverable "AIX" applications to end-users. (http://www.techweb.com/wire/story/TWB20000105S0015) From the article: "..."This will give IBM 25 to 35 percent of its new AIX growth in 2000," said Brad Day, an analyst at Giga Information Group, Cambridge, Mass. "RS/6000 will piggyback on this. This makes sure that AIX users are not going to defect to Solaris..." This analyst sees the growth for this segment of the business at a 25%-35% rate! (J. Kelly well above your 20% growth guess). If you add the "projected" market growth rates for each industry segment that SUNW is developing products, services and applications for, I think the current high PE is justified. Just think, at a 30% growth rate, the market revenues double in under three years! If your company can maintain good margins and deliver all the new products and services, then you have a a money machine that will demand a high relative premium. Given the future prospects for SUNW, I still believe the stock is undervalued at these levels given a five to seven year time line. EKS

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