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Technology Stocks : The New QLogic (ANCR)

QLGC 16.07

0.0%

Aug 24 5:00 PM EST

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To: iceburg who wrote (27012)	5/17/2000 1:13:00 AM
From: Kerry Lee	Read Replies (1) of 29386

<<I am quite certain we will get our long awaited blows in now. I figure we can get 1/2 the switch market in a couple quarters. On top of that QLGC already has sales and earnings exceeding BRCD. All the while BRCD is enjoying a market cap over twice QLGC>> Steve, IMO the BRCD market cap versus QLGC is refective of 3 factors: 1. BRCD is a PURE Fibre Channel play ( which might come back to haunt them in the long run if you believe what Gilder/Merrill Lynch has been spewing )whereas QLGC derives 2/3 of its business from SCSI adapters. 2. BRCD has a ( current ) dominant market share of 90% in the switch space ( although this will surely change when Sun starts to ramp..Wall St does not understand yet that Ancor switches will be imbedded in the disk arrays as opposed to "just another reseller agreement" ). I don't believe Q has a 90% share of the host bus adapter space. 3. QLGC sequential growth rate has been 9-10% in recent quarters. The most recent Q qtr was a 70-75% topline growth versus YA. However, 1 analyst has this upcoming quarter ( Q1 2001 )estimated at $66 million revenues versus $43.2 million YA. This is a 53% year over year growth rate whereas BRCD continues to show/forecast triple digit growth rates. BRCD has shown $20 million sequential growth in the past 2 quarters..I would not be surprised if BRCD generates a $75-85 million quarter in revs this next quarter. There's alot more VAR/Integrator warehouses left to fill when you think about the worldwide fibre channel (stuffing ) market opportunity

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