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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: taxman who wrote (24133)	6/14/1999 5:16:00 PM
From: t2	Read Replies (2) \| Respond to of 74651

assuming you are correct about the pc sector, to whom will msft and intel sell their merchandise? I might not be correct about the sector (obviously). I just think unit sales will grow a lot but for the PC companies this may be offset with reductions in average selling price. MSFT and to some degree Intel are able to control prices on their products. Intel faces little competition from AMD. I believe Intel just cuts prices on cheap CPUs just to make sure AMD does not make a profit and strengthen itself. They keeps prices high on high end chips. However, in selling PCs, there is a lot of competition. More competition means lower selling prices=lower margins. This is going to result in slower growth rates which in turn means stock prices will not go up like before. A few companies like Dell may still do OK but they face a lot of competition. Even the threat of more competition can knock a stock down (and its PE).---Just look at Intel's PE as an example. Growth not bad but the threat of increasing competition will not let the stock move up. IF a PC company makes its numbers for this quarter(or even upside surprises), big time selling pressures are still going to be there, IMHO. When you listen to Rollins from Dell start talking about some surprises in this quarter (going into other businesses--net related), you know that they cannot grow just being a PC seller. However it appears that investors' love affair with internet stocks is just about over---and if Dell introduces Dell-online etc, will it excite the investors? I am not so certain unless this really helps in generating additional Revenue. If the internet stocks rebound in a big way, maybe things will change. It is such an unpredictable bunch of stocks---the PC makers. I am still going to buy Hewlett, Dell, Gateway but won't until later in the year. Right now the sell side analysts appear to be more influential and won't let the "pure" PC stocks go up. It is all about the market sentiment for these stocks stocks.