I am sure Bruce Brown or someone will correct me if I am wrong, but I doubt there is any historical example of any company in any time, that already had nearly four billion in revenues, that went on to grow earnings, revenues, and free cash flow fast enough to justify such sky high ratios. QCOM had to come down sooner or later. Lost momo players, delayed China news, delayed Nokia license news, etcetera were just near term facilitators in its manifest destiny for lower prices.
Qualcomm was one of the first of many to deflate which led to my phrase "have your stocks been Qualcommed?". Surprising that QCOM inflated again at the end of 2000 when it rose back over $100 a share on not much more than technical trading only to fall back down into the $40's. Ouch twice!
Interesting article concerning visiting the analyst's couch in regards to technology stocks.
thestreet.com
In addition, here's an interesting thought during an interview with Elaine Garazelli in mid August:
Question: With the Standard & Poor's (S&P) 500 Index's [$INX] price-to-earnings (P/E) ratio at around $26, well above the historical average of $14.5, is the stock market still somewhat caught in a speculative bubble?
Good question. I believe that the stock market continues to be overvalued if you include technology. On our 2002 earnings estimate for the S&P, the S&P's, excluding technology, P/E ratio is 15 1/2. With technology next year's earnings is $17, so I believe that there is room for gains in the S&P 500.
sageonline.com
Technology is only one portion of the market.
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