Addi, I corrected your quiz. You got a few (actually many) wrong!
Q: What does INTC manufacture?
A: Chips used in building PCs
Wrong. PC's, Workstations and Servers.
Q: How well did Intel's earnings do?
A: Great! In fact it beat the most optimistic numbers!
Right.
Q: Who buys from Intel?
A: PC makers such as DELL, Compaq, Gateway 2000, Joe's PC factory shop, etc.
Wrong. What about IBM, Unisys, NCR, NEC and many other large Server vendors.
Q: What does Intel's great earnings report translate into?
A: That PC makers such as Compaq are facing an extra ordinary demand for their PCs, especially since they started selling directly to the regular consumer market.
Wrong. XEON's and PII workstations are selling very well. That is why you see higher margins.
Q: What does this desire to be connected to the internet mean?
A: In short the internet computing model via thin client/server centric architecture is growing explosively.
Wrong. Not necessarily.
Q: In this new server centric architecture model who gains the most with the highest profit margins?
A: Those that make the servers.
Wrong. Those that make servers, PC's and Workstations at an affordable price.
Q: Who is leading in the server marker?
A: Sun Microsystems. But it really does not matter. All server makers are facing huge demands for their servers.
Wrong. It will matter. When businesses have a viable choice to high priced Unix servers, will they still purchase 1 million $ servers.
Q: What can we conclude?
A: That Sun Microsystems will have a blow out quarter, and hence the current valuation of the stock continues to be extremely cheap.
Wrong. Is is overvalued with decelerating earnings growth.
Q: What should SUNW longs do at this time?
A: Just relax, sit back and take advantage of any dip to buy more of SUNW shares at these prices.
Wrong. They should be very concerned about their stock.
You had a wake up call today. I hope you didn't just hit the snooze control.
Dale |
