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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Zoltan! who wrote (32869)	3/24/2000 7:49:00 AM
From: Zoltan!	Respond to of 77400

>>Cisco is inevitable. And the inevitable will happen.... Cisco Briefly Surpasses Microsoft in Value By Adam Lashinsky Silicon Valley Columnist 3/24/00 7:00 AM ET The inevitable happened briefly Thursday: Cisco (CSCO:Nasdaq - news - boards) was worth more than Microsoft (MSFT:Nasdaq - news - boards). Why inevitable? Because, as the chart below shows, barring any disastrous blunders, Cisco has to pass the software giant -- even though Cisco's business is far less lucrative than the Microsoft monopoly. But there's a crucial area in which the two companies diverge. That's growth: Cisco's got it, and relatively speaking, Microsoft doesn't.... .... Former Microsoft Chief Financial Officer Greg Maffei used to warn Wall Street regularly that the Law of Big Numbers would catch up with Microsoft: A huge company simply cannot grow as quickly, in percentage terms, as smaller ones. Maffei's warnings mostly went unheeded as Microsoft managed to blow by revenue and earnings predictions. But that changed last year as the company's year-over-year quarterly revenue growth rate declined. In the quarter ending Dec. 31, revenue growth was 18%, vs. 38% in the same quarter of 1998. Cisco, in contrast, rang up revenue growth of 53% in its most recent quarter ended Jan. 29, an awesome accomplishment for a company of its size. This is why the market is willing to pay a heady 141 times trailing 12 months' earnings. Microsoft's price-to-earnings ratio, though inflated by standard measures (historically, analysts have looked for P/Es and growth rates to be about the same), is a relatively anemic 67 times trailing earnings.... ....The lesson learned has become part of the core curriculum for tech investors: Profitability is nice, but growth is better.... thestreet.com Better yet is growth and profitability, better yet is Cisco - The Winning Team. And yes, the inevitable will continue to happen.