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Strategies & Market Trends : The New Economy and its Winners

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To: Bill Harmond who wrote (10654)	2/27/2002 9:39:22 AM
From: Wizard	Read Replies (3) of 57684

After speaking with numerous companies this week, I have two preliminary conclusions: 1) Enterprise is off to a normal start. March is a set-the-budget quarter in all non-bubble years and that is what has happened. No big upside to IT budgets but no across the board cuts either. In this regard, this is a normal, non-bubble year where execution is necessary. 2) This is the obvious but, January and February for service provider budget revisions were disasters. The nuclear winter is in full effect. RBOC's are the only telecom buyers who can afford to buy and they aren't doing much. On the other hand, cable, DSL and wireless aren't great but not as bad as other parts. My conclusion, more of the same. Storage, software and other enterprise focused subsectors have an environment where they are going to have to execute well but for those that built some backlog in December quarter, should be a makeable quarter. Semiconductor stocks are locked in an odd place. Somewhat expensive as stocsk but inventory re-fill is proceeding and estimates are beatable. End market weakness is troublesome but with conditions clearly better than they were, a trading range seems likely.

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