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To: Donald Wennerstrom who wrote (11513)	9/9/2003 9:12:14 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95587

SECTOR WATCH: Analysts Turn Bullish on Tech By Frederic Ruffy, Optionetics.com 9/9/2003 3:00:00 PM optionetics.com Since the Labor Day holiday, analysts have been upgrading their ratings on large technology companies daily. Consequently, investors have responded by aggressively buying shares of Dell Computer (DELL), Intel (INTC), Cisco Systems (CSCO) and other tech heavy weights. Yet, as the share prices throughout the technology sector have been moving higher in response to the upgrades, the timing of the renewed sense of bullishness among analysts seems a bit off. After all, the share prices of many of these companies have already recorded large percentage gains during the past few months. The analyst upgrades that began after the Labor Day weekend started with a bullish call on PC-maker Dell Computer. On September 2, a Goldman Sachs analyst raised the rating on the stock to “outperform” from “in-line.” DELL rose on the news. On that same day, Bank of America started coverage on Intel and Advanced Micro Devices (AMD) with “buy” ratings. The analyst said the stocks are worth a look because the PC market is in the early stages of a recovery cycle from which both chipmakers will probably benefit. A day later, analysts at two brokerage firms upgraded stocks within the software sector. Morgan Stanley raised the rating on SAP AG ADS (SAP) to “overweight” and said it expects companies to start spending more on computer software. At the same time, Credit Suisse First Boston raised its view on enterprise software to “overweight” and upped its price targets for Adobe (ADBE) and Intuit (INTU). Company Symbol 14-Mar 29-Aug % Return Adobe Systems ADBE 30.79 38.83 26.11% Applied Materials AMAT 12.37 21.63 74.86% Advanced Micro Devices AMD 5.77 11.29 95.67% Cisco Systems CSCO 13.4 19.14 42.84% Dell Computer DELL 26.5 32.62 23.09% IBM IBM 79 82.01 3.81% Intel INTC 17.17 28.59 66.51% Intuit INTU 49.9 45.51 -8.80% Motorola MOT 8.19 10.73 31.01% Symantec SYMC 44.99 57.42 27.63% Xilinx XLNX 25.38 30.88 21.67% On September 4, analysts were once again talking up the tech sector. Applied Materials (AMAT) rose after a UBS analyst raised the rating on the semiconductor equipment maker to “buy” from “neutral.” Meanwhile, shares of Symantec (SYMC) got a lift after JP Morgan upgraded the maker of Norton anti-virus software from “underweight” to “neutral”. Analysts also upgraded their ratings on networking giant Cisco Systems last Thursday. Goldman Sachs raised shares to “outperform” and a UBS analyst boosted Cisco to a “buy” from “neutral.” Friday, semiconductor stocks were once again in the spotlight. The sector performed well despite an 82-point drop in the Dow Jones Industrial Average ($INDU). Chip stocks moved higher after Intel boosted its third quarter sales forecast and UBS Warburg raised its price target on the stock to $38 from $35. National Semiconductor (NSM) was also one of the big winners in the sector after getting a similar upgrade at UBS Warburg. The computer sector was the next beneficiary of analyst optimism. Monday, International Business Machines (IBM) moved northward after Credit Suisse First Boston raised the rating on stock to “outperform” from “neutral.” The CSFB analyst cited optimism about technology spending. The improved outlook compelled the analyst to increase the 2004 earning per share estimate to $5.10 from $4.80. IBM rose 2.5% following the upgrade Monday. The bullish talk continued on Tuesday. UBS AG raised its rating on Motorola (MOT) to “buy” from “neutral.” At the same time, Cisco Systems (CSCO) shares opened higher after Deutsche Bank raised the rating on the networking giant to “buy” from “hold.” Meanwhile, JP Morgan raised chipmaker Xilinx (XLNX) to “overweight” from “neutral.” All three stocks moved higher early Tuesday despite weakness in the Dow and the broader market. While stocks seem to be reacting favorably to the recent bout of analyst upgrades in the technology sector, many of these stocks had already made large percentage moves. The nearby table shows the performance of the stocks from mid-March until the Labor Day weekend. In addition, most of these stocks have added to those gains since the Labor Day weekend. For example, Advanced Micro Devices, which had risen 96% from March until Labor Day, is up another 9% since its upgrade on September 2. In short, the analyst upgrades in the tech sector are pushing stocks higher, but are also following a period of relatively strong performance in the sector. As a result, it might make one wonder if the upgrades are coming a little bit too late. In other words, where were these analyst upgrades in mid-March when the upgrades could have really mattered? Frederic Ruffy Senior Writer & Index Strategist Optionetics.com ~ Your Options Education Site Visit Fred Ruffy’s Forum