Merril forgets the biggest winner in this space: WIND
NEW YORK -(Dow Jones)- Merrill Lynch & Co.'s technology analysts
issued a report Thursday that forecasts an eventual move away from the
personal computer as the industry's focal point.
The report, which summarized a larger document being sent to clients,
lists 11 technology trends and 22 stocks that should benefit from them.
The firm said it sees a shift in the industry away from personal
computers as the driver of computer-hardware growth. In semiconductors,
there will be a move from PC-centric chips toward those that power
communications devices, according to the report.
Broadcom Corp. (BRCM) and PMC-Sierra Inc. (PMCS) are among the
companies Merrill Lynch projects will benefit the most from this shift.
Further, according to the report, the next hardware category will be
appliances, "representing a shift from general-purpose to specialized
computing." Network Appliance Inc. (NTAP) and Sun Microsystems Inc.
(SUNW) are two companies that will benefit here, according to the
report.
Tough times in the chip-equipment industry will likely result in
consolidation, especially given the low valuations of some of the
smallest companies in the sector. Brooks Automation Inc. (BRKS) is one
company likely to benefit from this trend, Merrill Lynch said.
Some of the industry's best-known names are missing from Merrill
Lynch's list: Dell Computer Corp. (DELL) and Intel Corp. (INTC) are two
notable absences. Steve Milunovich, the enterprise hardware analyst,
said the firm is still bullish on some stocks that weren't included in
the report, which focused on big-picture issues.
The Merrill Lynch report forecasts that data traffic will come close
to exceeding the amount of voice information traveling across networks
by 2003. The firm sees strong demand for telecom equipment for the next
few years and projects that mergers and acquisitions in the sector
should accelerate this fall. Stocks that could benefit include Cisco
Systems Inc. (CSCO) and Lucent Technologies Inc. (LU).
The firm said it is still enthusiastic about potential growth in the
Internet space, with growth likely in electronic-commerce and on-line
health-care companies. Internet-related companies mentioned in the
report include America Online Inc. (AOL), Microsoft Corp. (MSFT),
Galileo International Inc. (GLC), Sterling Commerce Inc. (SE), Cerner
Corp. (CERN) and IDX Systems Corp. (IDXC).
In enterprise software, the firm sees a shift toward programs that
enhance manufacturing and delivering goods and services. Two companies
likely to benefit here include i2 Technologies Inc. (ITWO) and Oracle
Corp. (ORCL), the report states.
The firm sees a transformation in the electronic-equipment supply
chain, aiding Molex Inc. (MOLXA) and Solectron Corp. (SLR).
Merrill Lynch claims that services will become the "ultimate
value-added segment" of the technology field. Companies likely to
benefit include Computer Sciences Corp. (CSC) and Ciber Inc. (CBR), the
report said.
Merrill Lynch also sees consolidation in the mechanical design
software space, mentioning Structural Dynamics Research Corp. (SDRC) and
Visio Corp. (VSIO) as two likely winners.
- Christopher Grimes; 201-938-5253 |
