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Technology Stocks : JMAR Technologies(JMAR) -- Ignore unavailable to you. Want to Upgrade?

To: Starlight who wrote (6696)	9/18/1998 6:18:00 PM
From: brent gephart	Respond to of 9695

Interesting Article from Merrill Lynch about Semiconductor Capital Equipment consolidation. Merrill analysts pick tech stocks Many familiar names recommended, but some surprises By Emily Church, CBS MarketWatch Last Update: 3:56 PM ET Sep 18, 1998 See: NewsWatch NEW YORK (CBS.MW) -- Merrill Lynch's technology analysts have picked 22 stocks that they think will outperform the market, based on a bevy of trends outlined in their 170-page report. Merrill's Tech 22 America Online (AOL) Broadcom (BRCM) Brooks Auto. (BRKS) Cerner (CBR) Ciber (TWX) Cisco (CSCO) Computer Sci. (CSC) Galileo Intl. (GLC) i2 Tech. (ITWO) IDX Systems (IDXC) IntegratedProcess (IPEC) Lucent (LU) Microsoft (MSFT) Molex (MOLXA) Network Appl. (NTAP) Oracle (ORCL) PMC Sierra (PMCS) Solectron (SLR) Sterling (SE) Structural Dyn. (SDRC) Sun Micro. (SUNW) Visio (VSIO) Some of the picks come from the technology and Internet "blue chips" -- valuations be damned. But there are some interesting twists: no PC makers; Intel (INTC), the leading chip maker, is left in the wilderness; and analyst Mark FitzGerald suggests premium prices may be paid in semiconductor equipment industry consolidations. Computer chips Analyst Thomas Kurlak expects "significant new opportunities" for the communications-oriented chip suppliers, as part of a broader trend in which he sees the communications equipment industry usurping the personal computer business "as the key driver of semiconductor growth," according to the report. "This shift in end markets, combined with the success of the fabless model, should result in growing fragmentation of the industry," he writes. Kurlak favors Broadcom and PMC Sierra. Among the chip equipment makers, FitzGerald selects Brooks Automation and Integrated Process Equipment. The industry's downturn, according to FitzGerald, should spark more consolidation. "Most of these acquisitions will occur at a premium to current prices because asset values have declined so sharply," he writes. Networking/wireless Analysts Joseph Bellace and Michael Ching are expecting demand for data network core technologies, such as switches and other equipment, to increase at a rate of 35 percent a year. Data traffic, they say, will consume 80 percent of all bandwidth by 2003. Beneficiaries will include wire-line equipment and data networking stocks, the analysts say, specifically naming Ascend (ASND), Cisco (CSCO), Lucent (LU), Nortel (NT) and 3Com (COMS). But they say they're not prepared to call investment opportunities in wireless stocks yet. Hardware/software In hardware, Steven Milunovich sees demand for specialized, inexpensive, limited-function appliances benefiting EMC (EMC), IBM (IBM), Network Appliance (NTAP), Sun Microsystems (SUNW). "Set-top boxes, PDAs [personal digital assistants] and home appliances will ship in high volumes as the consumer increasingly drives technology," Milunovich writes. "Appliances are a threat to the status quo, including the Wintel duopoly (Microsoft [MSFT] and Intel) and PC vendors." In software, Chris Shilakes sees the corporate optimization and execution software market growing to $8 billion in 2002 from $500 million today. He puts i2, Oracle and PeopleSoft (PSFT) on the list. Internet Jonathan Cohen and Tonia Pankopf remain optimistic about Net commerce and connectivity growth and are bullish on America Online. They also list Beyond.com (BYND) and retailer N2K (NTKI). Moreover, they write: "Online content companies and [Internet service providers] that support high-speed connectivity for consumers will be among the principal beneficiaries."