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Technology Stocks : Applied Micro Circuits Corp (AMCC)
AMCC 8.4500.0%Feb 3 4:00 PM EST
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To: Steve Warkentin who wrote (561)7/8/2000 10:51:52 PM
From: Trader Dave  Read Replies (2) of 1805
 
While there is a product transition slowdown in the rate of growth the win at cisco WOULD NOT offset loss of business at NT, if there were a loss of business...which there is not.

NT is currently the most powerful systems vendor at the optical core. Cisco, JNPR and others are potential major players, but NT is the gorilla in this segment.

But, the bottom line in all of this wild misunderstanding of the concept of a first derivative (it is not a SLOWDOWN! it is a TEMPORARY slowdown in the growth rate (aka first derivative of the growth)

For the people that actually know what's going on, AMCC's position in NT's second generation oc-192 products is just as strong as its current position in NT's oc-48 products. In some cases amcc chips are part of JDSU modules designed into NT's products, but the most important issue is that AMCC's footprint is expanding rapidly and they have essentially 100% presence in all of the OC-192 vendors.

If NT business grows at 80% compounded and is 45% of revenues and non-NT business grows at twice that rate, I would guess that NT's percentage of revenues will go down....D'OH!

This silliness has created a compression in valuation that makes AMCC only wildly expensive, which is much less expensive than many comparables.

TD
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