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Technology Stocks : All About Sun Microsystems

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To: Charles Tutt who wrote (42295)	3/23/2001 7:06:42 PM
From: uu	Read Replies (1) of 64865

> Lots of people last year seemed to think Microsoft (with sales in the same ball park as Sun, and a lower growth rate in earnings from operations) would achieve a trillion dollar market cap. If MSFT can get there, I don't see why SUNW can't. Eventually Well those people were proven to be wrong and will continue to be proven wrong. I am almost confident - in fact 100% - that I for one will not see any company (and I mean any company) in my life time to have a market cap of $500 Billion+ (let alone 1 trillion dollars) - inflation adjusted of course. It simply will not happen. For any single company to achieve such high valuations the US economy must grow by a factor of 10%+ with global economy growing at almost the same rate. Who knows in 40-50 years from now the US economy maybe fine tuned to handle 10% growth, but I very much doubt that. In the case of Sun, servers will be needed and I am sure with new technologies emerging Sun can also adjust itself. However Sun's growth will not in any form or shape be as it was during 1997-2000. At best in my view Sun's growth rate will be in the 15%-20% range (which of course is still very impressive and I am sure the stock itself will eventually adjust itself to reflect this realistic growth rate). The next wave of growth will be with Companies such as JDS Uniphase which will deliver a growth rate of (at least 50%+ for the next 3-4 years before their growth also comes to mature. But if you are looking for aggressive growth companies (which also can be very volatile) look no where but to JDS Uniphase. As for MSFT, it also has matured and it will not have the growth rate of any more than 15%-20% (which by all standards is still impressive). Going forward investors will come to learn (some in a rather painful manner) that reality check should always be on when it comes to growth rate and valuation of companies such as Sun, and Microsoft, and to some extend Cisco (although Cisco's growth will still be 30%+ for at least another 2 years or so IMHO). As always keep in mind I have proven to be wrong many many times in the past. Regards,

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