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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (158674)	7/21/2000 11:29:38 AM
From: calgal	Respond to of 176387

Jul 21 2000 4:00AM ET More on Stocks Contributor... The Technology Halftime Report By Pat Dorsey Stocks Editor, Morningstar.com Special to CNBC.com It is about halftime in the mid-year earnings Super Bowl, so let's see what clues we have about where the technology sector might be heading. In general, there haven't been too many surprises. Anything remotely associated with bandwidth, connectivity or wireless is doing well, and anything remotely associated with Big Iron is stinking up the joint. This is why a systems software company, such as BMC Software Inc. {BMCS}, sells for something like 15 times forward earnings estimates, while hot Internet infrastructure plays like Juniper Networks Inc. {JNPR} go for closer to 500 times 2001 estimates. Not too hard to figure out. Let's start with PCs, since there isn't a whole lot going on these days. There seems to be a slight shift in PC demand away from the low end and toward the high end -- witness last month's profit warning by low-end vendor eMachines Inc. {EEEE} -- but in any case, it is becoming increasingly clear that PC makers need to do more than just sell beige boxes to survive. They either need to develop decent-size streams of higher-margin non-PC revenue (like Gateway Inc. {GTW}) differentiate their product line (like Apple Computer Inc. {AAPL}), or push hard into other hardware areas (like Dell Computer Corp.'s {DELL} move into storage and servers). Gateway's earnings report showed that non-PC revenue can make a big difference to the bottom line, while Apple's showed that when your strength is cool products, you have to keep churning out ever-cooler ones to stay in the game. In telecommunications equipment and networking, the story is the same broken record we have been hearing for the past six months: incredible demand, component shortages and companies that are running flat out just to keep up. Corning Inc. {GLW} announced that it would exceed the Street's estimates for the quarter and then proceeded to blow away the raised expectations, while Juniper Networks somehow managed to turn in revenue 50 percent higher than most people were looking for. Meanwhile, Lucent Technologies Inc. {LU} showed Thursday how hard it can be to catch up in a market that moves so fast. After losing a lot of optical ground to Nortel Networks Corp. {NT} earlier this year, the company is having to cut prices to get back in the game, which is one reason why it was forced to lower its bottom-line growth targets for next year. Weaker Outlook Slams Lucent Shares Turning to chips, it looks like flash memory -- which, among other uses, is a key component in cell-phone handsets -- is one of the bigger stories. Silicon Storage Technology Inc. {SSTI}, for example, turned in a Corning-like quarter by pre-announcing better-than-expected results, and then exceeding the preannouncement figures. If you're looking for an interesting back-door play in this fast-growing market, take a look at Advanced Micro Devices Inc. {AMD}. Although the company is better known as a scrappy competitor to Intel Corp. {INTC} in the microprocessor business, it also happens to be a big kahuna in flash memory -- and the flash-memory business isn’t getting the respect (or the valuation) that it deserves. cnbc.com