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

To: Monty Lenard who wrote (40236)	9/28/2000 7:18:44 PM
From: RetiredNow	Read Replies (2) \| Respond to of 77400

Hi all, I was taking a look at Sagawa's telecom spending slowdown report and it is a joke. Read what he says about why he believes Cisco's growth will slow. Here's an excerpt: "According to the report, this could be Cisco's ninth and final consecutive quarter of year-over-year growth. Growth rates are expected to decline from a high of 63 percent back to Cisco's traditional range of 30 to 50 percent growth, says the report. Why? One reason cited is that even though 30 percent of Cisco's revenue comes from service providers, that amount also accounts for 80 percent of its growth. That means that if carrier spending slows down, so will Cisco's growth. The second reason is that in the last quarter products from the Cerent, Aironet, and ArrowPoint acquisitions have all contributed at least 10 percent of revenue and 61 percent of the company's growth. But as these markets mature the growth will slow down." This is a stupid observation, because he is saying that optical, web switching, and wireless industry growth is going to slow down enough to affect Cisco's growth. That is a ridiculous assumption, given that these markets are in their infancy and nowhere near maturity. They are in a hypergrowth stage, which have left the equipment manufacturers like Cisco and Nortel unable to make enough product to satiate demand. His assumptions are faulty and the effect on the stocks was overblown. Whoever bought in the last couple of days made a good buy. Nortel and Cisco will continue to excel and outperform their competitors and any short term telecom spending slowdown simply won't have the big effect on Cisco and Nortel that analysts expect.