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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Mary Cluney who wrote (120934)	12/6/2000 5:01:40 PM
From: GVTucker	Read Replies (2) \| Respond to of 186894

(Mary, please note that I intentionally biased this report with a bearish spin on everything. That is primarily because you wanted to hear what the Street is saying, and right now all you hear is the bearish spin. There aren't too many people that are making any money right now, and thus they want to believe that everyone is having problems, which probably has as much to do with the biased thinking as anything else.) A First Boston industry report issued this morning summarizes the Street's attitude pretty well: Bottom Line For the second time in two weeks we are lowering our PC industry unit growth forecast for Q400, Q101 and Q201. Apple's announcement last night that the company would post only $1 billion in December quarter (Q1) sales versus our expectations of $1.5 billion and the Street's $1.6 billion underscores the rapid deterioration in the consumer PC market. We believe signs are beginning to emerge that the PC slowdown is not limited to the consumer market. Large commercial customers, fearing an economic recession, may be reducing IT budgets for 2001. Many small and medium sized businesses have already cut back on hardware investments. Additionally, many dot-coms have gone belly up this year, reducing the pool of new customers. Dot-coms represented a sizable proportion of new IT investment during 2000. The rumblings going on are that there is a real business slowdown going on and commercial accounts seem to be cutting back 2001 budgets pretty sharply. Deeper into the report, First Boston quotes their Asian semi analyst, Kevin Chang, who met with the top 5 portable suppliers who are responsible for 40% of the industry's portable production. He reported that Q101 sequential growth would be 6.5% from these companies, which is down from the previously expected 15%. DELL is being highly aggressive right now in pricing proposals to large corporate customers in hopes of keeping revenue growth within expectations. In the process they may be killing their own margins and everyone else's. HWP is trying their darndest not to warn but at the same time lower expectations. I'm not sure if today's analyst meeting was on the web or not. I am told that Fiorina told everyone that they would meet forecasts for 2001 revenue growth, but then went to great pains to emphasize that their definition of meeting expectations would be meeting the lower end of forecasts. She also basically said that HWP's forecast was contingent on an economic pickup next year, which sounded to me more like a 'things stink right now but we're hoping they get better in time to save us'. CPQ and INTC are currently praying that things pick up for the rest of this month. INTC already killed its credibility by warning last quarter after they said they wouldn't warn, so they might as well take a chance this quarter and if it works, they can embarrass the analysts and regain a whole lot of credibility in the process. If it doesn't work, well then heck, no one believed them in the first place, so what's the harm? In short (or given this post's length, perhaps it should be in long) it is hard to find any silver linings right now, and thus it is easy to twist everything into a negative.