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

To: Trio who wrote (31497)	11/1/1999 5:38:00 PM
From: Jim Lamb	Respond to of 74651

As usual, it's all about Microsoft Windows 2000 should fuel software stocks By Colleen Bazdarich, CBS MarketWatch Last Update: 2:31 PM ET Nov 1, 1999 Personal Finance News Join the discussion SAN FRANCISCO (CBSMW) -- All looks good for the tech industry once again, with everybody talking about the new silicon-driven Dow. "I think where software is meeting the Internet is probably the most exciting." Chris Galvin, Hambrecht & Quist But how will stocks look long term? In the software sector, things should heat up even more next year, says analyst Chris Galvin of Hambrecht & Quist in San Francisco. Watch out for the release of Microsoft Windows 2000 in the first quarter, says Galvin, which should add fuel to that company's fire and boost up numbers in the software industry in general. CBSMW: What's been going on in this sector? Galvin: Software as a category has been doing really well. The leading names in the software group are not just performing well but are definitely market leaders. CBSMW: Your picks? Galvin: From a 30,000-foot perspective I think Microsoft (MSFT: news, msgs) is not just reporting good results but is in front of a major product cycle next year. I think that is an important trend -- the whole movement from Windows NT to Windows 2000. Some of our other favorites include companies like Citrix (CTXS: news, msgs) that are providing service-based computing software that makes Windows NT more powerful in certain situations. It gives users the ability to remotely run Windows applications. Another area that I am particularly enthused on these days is testing, and the category leader there is Mercury [MERQ]. Finally, Rational (RATL: news, msgs) is another company that I like a lot. CBSMW: How do these companies look over the next couple years? Galvin: Each software company is going through its own product cycle as opposed to semiconductors and PCs and all that. Software as a group is not as monolithic (as the hardware sectors), but the companies that I pointed out are ones that I think are in front of powerful product cycles over the next few years. They are going to have a favorable impact on results. CBSMW: What is most popular branch of the software industry? Today in Personal Finance Donny Osmond makes a financial comeback The Windows 2000 effect: Software stocks will jump How to judge your online broke A tax write-off for a used car donation can be tricky Marshall Loeb: Savings bond yields jump More personal finance news... CBS.MW front page Updated: 5:33 PM 11/01/99 Galvin: I think where software is meeting the Internet is probably the most exciting. Traditional software companies, as they evolve their businesses to take advantage of e-business and e-commerce, without a doubt are enjoying probably the most substantial rising tide environment. CBSMW: What are the risks involved in getting in long term in this sector? Galvin: Software, like a lot of technology, is very volatile. CBSMW: How should long-term investors go about picking good software companies to invest in? Galvin: I think with software basically you always want to be in front of a major product cycle and in front of a company that is going after a new market. All the companies I identified have that. CBSMW: What are going to be some of the new markets? Galvin: I think there is just a big opportunity around the release of Windows 2000 coming in the March quarter of next year. That is the new release for Microsoft, the upgrade for Windows NT 4. I think that it is going to be a powerful new release that will drive opportunities for other players as well. CBSMW: Do you think 2000 is going to be as big as the Windows 95 launch? Galvin: I think it is going to be bigger, but it is going to be different. Instead of a big PC impact, I think it is going to have a bigger server impact.