. in order for telecommunications and data storage to continue (and accelerate) their growth ramps, Power related stocks MUST GROW EVEN FASTER. Take into account that most of the companies in this field actually are in the 20X-30X P/E range, and I think the opportunity can be seen
I'm sure you have an argument to back that claim up, but I would just like to point out that while this argument is intuitively appealing, it has some questionable underlying assumptions.
First, you have to ask yourself: does employing more storage or deploying more bandwidth create a proportional increase in the need for power? I'm not so sure of this.
Second, even if an increase in the deployment of storage and telecommunications bandwidth resulted in a proportional increase in demand for power, this would not translate into wonderful growth for power (utility) companies. That would only work if the only source of demand for power came from these two areas (storage and networking). So even if the power demand from those areas is growing at 50% Y-Y (or however fast S+N are growing), the impact of that subsector on the growth of overall power demand would be minor.
Of course, with companies like AMSC it's a different story. AMSC, with potentially disruptive technologies, is not dependant on the overall growth of power demand for its growth, since it can effectively eat into current market share for the various technologies (motors, wires, etc.) it hopes to disrupt.
Later,
Andrew Danielson |
