New Positivity in PC Sales By James J. Cramer
4/7/99 7:36 AM ET
A new, more positive consensus just formed about PC sales, and we are seeing the effects in the stocks these last few days.
After a crummy February, March PC sales picked up pretty dramatically, courtesy of Intel's (INTC:Nasdaq) new Pentium III. This product ended the freeze in the market and allowed business to move forward.
I have been loath to play this move with anything other than the highest-quality names. Yesterday, for example, with all of the hoopla about Sun Micro's (SUNW:Nasdaq) new Microsoft (MSFT:Nasdaq) killer and Dell's (DELL:Nasdaq) investment in Red Hat, another anti-Microsoft product, I took advantage of the weakness in Microsoft and bought more. (In this market, down 1 1/2 is weakness.) What the heck, the real winner in any spurt in computer sales is still Microsoft, with Intel a close second. Don't need to outthink this. Never do.
How long can this spurt last? You've read the same stories I've read, about how the Pentium III just doesn't get people excited enough to migrate, so I can't be sure. But what is more important is the consensus itself and how it was just formed, by examining just-released March data. Some, including me, were getting worried that there wouldn't even be this spurt, that this introduction would do nothing to spur sales. That worry was wrong.
And with so many of the PC stocks down big from their highs, it seems like a decent trade. Certainly not of Net proportions, but certainly nothing to sneeze at.
Random musings: The Wall Street Journal leads with Ford (F:NYSE) sales today. Hey guys, I know you have to make use of that Detroit bureau, but how about a little recognition of what's going on with this market? Save that stuff for the Detroit Free Press.
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