Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: J R KARY who wrote (4099)	10/26/1998 1:16:00 PM
From: Arrow Hd.	Respond to of 8218

JR, as you know from one of my other posts, I was concerned about what was going to come out of the Gerstner interview. My read on Y2K is somewhat different from yours. True, there will be enormous opportunity the next three quarters as customers buy ahead of the 2H 99 data center stabilization but Gerstner's comments made it clear to me that the second half of 99 is going to be a real challenge and no one knows whats going to happen. Remember his comment about the robots going crazy when they dialed in a year 2000 date. I see this as his public warning to customers and shareholders that there is uncharted territory ahead. Somewhat like a "truth in advertising" statement. Since IBM sole sources due to the downsizing and cost/ expense control, one blow-up shuts down the food chain. In another statement Gerstner stated "the next three quarters are going to be absolutely critical because the second half of '99 is a real unknown". IBM is already getting about as much services business for Y2K remediation as possible so there is limited upside there and what opportunity exists is for hardware and software upgrades to become Y2K ready and this is what I was referring to as a bubble effect. That said, in the meantime the fourth quarter will probably be terrific and since the first half of any year tends to be slow any bubble will contribute to potential blow out numbers. I could see the stock by early Spring at 160 to 170 with a split announced, more buyback dollars allocated and a small dividend increase. But as it sits now with my personal view (only an opinion!) I think it will be very difficult for 2H '99 to beat 2H '98. But, even if true, when does the market recognize this and start to discount the PE.