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Technology Stocks : How high will Microsoft fly?
MSFT 492.01+1.3%12:59 PM EST
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To: mxyztplk who wrote (1623)6/17/1997 1:05:00 PM
From: johnd   of 74651
 
Brian, Arno and others:

I don't think people should bail out of MSFT for the next 5 years.
I see 30 - 50% growth till then. The reasons are simple and easy
to understand:

(a) The movement to enterprise computing - NT gang has just
started. Mainframe and UNIX computing will eventually give in
to NT. This is a 60 - 80 Billion market for MSFT, with OS, apps,
software services.

(b) The covnergence of PC and TV hasn't even begun. MSFT will reap
many billions here.

(c) China and India have single digit PC penetrations but have
combined make up 10x the pupulaiton of US. Here the WINTEL
makret is grwoing 50% + per year.

THere may be some road bumps along the way but for the next 5
years, I don't see why people should bail out of MSFT.

I can make an argument why we could see 200 by early next year,
300 by early 99 and 400+ by 2000. The argument is growth
and earnings and PE that market is willing to pay.

I forsee 2.65 FY97, 3.5 in FY98, 4.8 in FY99, 6.00 in FY2000.
If MSFT continues to demand 57 - 60 PE. You are looking at 360+
by early 2000 and 400 by end of 2000.

For the short term, I see 145 by July end and 170 by Sept end.

The sharpest earnings and revenues growth era has just commenced.
Besides, the 2.1Billion in R&D spending should tell you something
about grwoth flow.

DId you know the revenue per user of NT is $365+ compared to $30
per Windows user?
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