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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: cheryl williamson who wrote (17238)	6/21/1999 3:03:00 PM
From: Marvin Mansky	Read Replies (4) \| Respond to of 64865

READ THIS: from Bear Stearns.Andrew J. Neff (212) 272-4247 June 21,1999 aneff@bear.com Shaw Wu (212) 272-5928 swu@bear.com William Bao Bean (212) 272-6915 wbean@bear.com Subject: Industry: Enterprise Wide Servers BEAR, STEARNS & CO. INC. EQUITY RESEARCH Sun Microsystems, Inc. (SUNW 62.25) - Buy Focus Stock Of The Week: Sun At The Center Of The Universe ______________________________________________________________________________ Data Shares Out 823.5 Market Cap(MM) $48,895 ______________________________________________________________________________ Key Points * As we review the takeaways from our Technology Conference, all roads lead back to Sun Microsystems as the provider of infrastructure for the Internet and for the new generation of application service providers (ASPs). * Sun's key strengths are its core technology (Sparc microprocessor, Solaris operating system, scalability), its vision of a networked world and its history of execution. Strategically, Sun's continues to focus on expanding its product line, its sales force and the available market for its products from its historic base in the technical market into the commercial, telecom, NT server environment, consumer markets increasing the potential for above- average growth. *** Business trends remain strong in all geographies and in most product lines. We are maintaining our estimates for FY1999 of $1.40, for FY2000 of $1.65 and for FY2001 of $2.00. ______________________________________________________________________________ Earning Estimates P/E Q1 Sep Q2 Dec Q3 Mar Q4 Jun Year Year 1999 0.25 0.34 0.35 0.46 1.40 44.5x 2000 0.29 0.38 0.41 0.57 1.65 37.7x 2001 0.36 0.47 0.51 0.66 2.00 31.1x ______________________________________________________________________________ Focus Stock. We picked Sun Microsystems as our Focus Stock is because we feel that Sun best epitomizes the trends discussed at our Technology Conference, including our "Virtual Computer Conference" including the growth of the Internet and e-commerce, growth of ASP's (application service providers), and transformation of the telecom world to IP (internet protocol) standards used in the datacom world. We think of Sun as the "Internet Enabler" or the company which is best positioned to supply the "dot.com" companies and those Global 2000 who wish to "dot.com" their companies. Full Product Line. Sun plays in all the growth opportunities with its full suite of hardware, software, and services including fault-tolerant, highly scaleable server technology (Solaris OS, Ultra-SPARC architecture), unique partnership with AOL for e-commerce, and interoperability with Java, Jini, and Project Cascade technology. Highlights from the Virtual Keynote. On Monday, June 14, CEO Scott McNealy was a keynote speaker at the Bear Stearns "Virtual Computer Conference". Here are our key take-aways: The Vision Thing. We think McNealy as one of the most visionary leaders in the technology world which is one of the driving forces behind Sun's vision and strategy. We believe his vision of Sun as the dot.com infrastructure supplier of choice highlights our thesis that one of Sun's key strengths is its ability to leverage off its technology portfolio of software and hardware to create new market opportunities and applications that drive further growth. For example, Java and Jini as stand-alone units may not appear to contribute to Sun's top and bottom lines, however, they have been key to Sun in gaining new customers and entering new market segments. We have seen this recently as Sun has penetrated into the data center and telco central office markets with its "write-once, run anywhere" Java and its fault-tolerance server technology. In the future, we believe Java and Jini have potential to become significant contributors as the technologies become more widely deployed in clients, servers, alternative computing devices, and embedded applications like set-top boxes, cell phones, and smart cards. Quarter Appears on Track. The upcoming 4Q99 (June) quarter appears on track, we are looking for $0.46 vs. $0.36 (also the First Call average) on top of 19% revenue growth to $3.4 billion - we believe this estimate may turn out to be conservative owing to the strong momentum in the U.S. and Japan from ISPs (Internet Service Providers) and Telecom companies due to Sun's stronger focus on these highest growth markets. eBay, Transvirtual Not Significant Issues. While there was concern about the role of Sun's Solaris software in the eBay outage along with word of Microsoft's backing of Transvirtual, a Java clone developer, we would view these as short-term distractions. Maintaining Estimates and Buy Rating. We are maintaining our estimates of $1.65 for FY2000 and $2.00 for FY2001. We continue to rate Sun Micro a Buy to reflect our belief that the company remains one of the best ways to play the explosive growth of enterprise servers, e-commerce, and server consolidation. We believe the company's strong fundamentals remain intact with the prospect of further upside surprises owing to favorable demand trends. We view the current weakness in the stock as an opportunity to add to positions. Companies mentioned: AOL First Call Corporation - all rights reserved. 617/345-2500 END OF NOTE

To: cheryl williamson who wrote (17238)	6/21/1999 10:41:00 PM
From: James Wamsley	Read Replies (5) \| Respond to of 64865

Well, you folks have been a real help to me in deciding my near term actions. The high PE and YPEGR on SUNW, my current >200% gain in the stock and the thread's nearly hysterical reaction to MD's routine PR, have all convinced me to sell SUNW and buy DELL (which is undervalued for the near term). Methinks thou doth protest too much!

To: cheryl williamson who wrote (17238)	6/22/1999 7:52:00 AM
From: Stormweaver	Read Replies (1) \| Respond to of 64865

>> DELL is a screwdriver DELL is an open iron vendor (at least), while Sun is a proprietary iron vendor. Open iron gives the customer the ability to chose what OS they will run. I think Michael was right on this call ... "that comes from the guys at Sun Microsystems and places like that, who are basically trying to disrupt the tremendous market momentum that exists around the PC industry, which they rightly see as a threat to their franchise. The first reason they are wrong is that the market has already told them they are wrong, which is the best litmus test of all. Sure, there are certain forms of 'server-based' computing, but there's only a tiny percentage of the market going that way." McNealy knows Sun only makes decent margins in the high end and that's why they are trying to push us back to the 70's view of big iron and dumb terminals (net appliances). This model is not a feasible strategy for competing with Wintel; unless you want to trade in that PC your typing on for a Java Station Cheryl ? Sun continues to ignore the desktop and one day soon it will bite them right in the you know what ;)