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Technology Stocks : Dell Technologies Inc.

DELL 125.97

-1.0%

Nov 25 3:59 PM EST

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To: hdl who wrote (156763)	5/5/2000 7:37:00 AM
From: GVTucker	Read Replies (2) of 176387

hdl, RE: Enough about Fleck, what does Mr. Niles say? Funny you should say that, he spoke this morning. "We believe Dell's had a good finish to the quarter with a good outlook especially for the 2H:CY00. Following a weak January, Dell saw a pickup in demand in late February following Microsoft's Win2K launch on February 17. We believe business continued to pickup in March with a good finish in April. Though Europe continues to be problematic as we expected, the US and Asia have seen a good pickup relative to Q4. We expect Europe to pickup later in the year under the leadership of new management. More importantly, we believe Dell's outlook for Q2 is solid with momentum improving. ú We believe that ASPs were down slightly q/q with units up at least 5% q/q. We believe Dell's approximately 70% revenue exposure to medium & large business is helping both unit growth and ASPs q/q as those market recover following the Y2K sluggishness in Q4. In our opinion, PC pricing seems rational at present with competitors such as IBM (IBM $107-5/8) and Compaq (CPQ $27-3/16) focused more on increasing profitability than market share. ú Portables and servers continue to grow at about 50% y/y. Desktops growth is recovering back into the 20s. We believe this mix shift is helping both margins and ASPs. Dell is using some of the margin upside on heavier infrastructure build-out. We believe Dell is getting the processors necessary given Intel's (INTC $119-9/16) desire to keep AMD (AMD $90) out. We believe Dell's #2 position in worldwide PC servers should benefit them as Win2K gains momentum in 2H:00. We believe our 33% CY00 unit growth is conservative given the 50% growth seen last year. We anticipate this should be driven by the return in corporate and continuation of consumer momentum. This in turn should enable ASPs to be down slightly y/y vs. the 8% decline seen last year. We reiterate our Strong Buy rating "

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