Hi Pigboy,
Forgive my responding to your post, I dont think that you will see any new brightspots at the Intel earning update.
IMHO:
A. FOR 2001, COMMUNICATION IS DEAD, DEAD, DEAD !
Today communication customers, like Cisco and the other darlings, are almost comatose ! I continue to hear rumors that Cisco has at least one more round of layoffs, and write-offs. Cellular is still suffering from major indigestion, and the excess inventory will take some time to be digested.
B. BUSINESS COMPUTING IS STILL SINKING:
Capital expenditures continue to shrink and today San Jose Mercury News reports that IT budgets are being cut every month.
www0.mercurycenter.com
This is reflected in Sun's earnings warnings and financial woes. Scott McNeely was recently asked if he had seen a bottom, and he quipped " the only time I get to see a bottom is when I change my sons diaper". However Sun's pain may be Intel's gain. The shrinking IT budgets may accelerate the transition to XEON with Linux, or Windows 2000. [ Itanium will not contribute meaningful profits until next year.]
C. CONSUMER COMPUTING SHOULD "BOTTOM" OUT VERY SOON:
Consumer spending has "bottomed", and consumer confidence is stable. The tax cut should stimulate something ! Intel expects a seasonal upturn in this segment soon. The new Windows XP should be another stimulant. Silicon Investor postings in the last few days imply that Intel may be regaining consumer market share from AMD.
The weakest part of the economic equation is capital spending. Greenspan's interest rate cuts will eventually ignite capital spending. But, when ? ? All in all a real uptick in earnings is at least several months away.
However the stock can take off in anticipation of an uptick ! |
