What's been happening is they've been changing the whole manufacturing process. Suppliers are now required to be on the premises or pretty damned close to it.
The general tech market has recalibrated their investment view that there's going to be very little tech recovery, very little pick-up in IT (information technology) spending in 2002; they're putting it off until at least 2003. So people figure, why buy these companies now?
You have Taiwan Semi saying that future orders look weak and that's indicative of a lot of companies. You just had Sun Microsystems (SUNW: down $0.35 to $3.70) return to profitability, but then take it back for the next quarter. All these comments show that any tech recovery is probably pushed back until 2003.
These stocks are pretty much earnings driven. If the earnings come through, I think the stocks are going to move higher and, on balance, I think we are in a healthy environment, which bodes well for stocks in this whole group.
Dell had some very good numbers in what has been a weak quarter for tech, but the results are more indicative of their success in gaining market share. There is nothing in their statement that implies IT (information technology) spending has picked up.
Dell is more the exception to the rule than the rule for what we're gonna see from other technology companies. This is Dell picking up market share in a no-growth market.
When you cut through some of the issues associated with Asia, the underlying demand for personal computer technology is still quite healthy.
Dell is a company that I think may have some value here but as its earnings growth comes down I think investors are looking at a multiple closer to where earnings growth rate is starting to show signs of bottoming out.
What we're seeing with tech is consistent with the last few weeks and before. There's a lot of red out there and it doesn't seem to be any one sector in particular.
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