We believe Microsoft will be hurt by weakness in the consumer PC space, which represents roughly 10-15 percent of its business. As we have said, the shift to browser-based computing is slowing the need for upgrades, and perhaps the more sophisticated gaming platforms are removing the need for homes to have the latest high performance PC's. As a result, corporate PC's will have to pick up the slack in the next quarter.
More Quotes from Chris Shilakes:
Applications growth will again be a key focus for investors, although it contributes 25 percent of license revenue at present. We understand Oracle landed a couple of large deals in the quarter, perhaps 20 million in size, so there is some traction here.Chris Shilakes
Our model forecasts applications license revenue growth of 55 percent and database license revenue growth of 18 percent. We expect Oracle to deliver applications growth consistent with our model and database growth in-line to slightly better than our projections.
Chris Shilakes
We do not believe that investors should be buying MSFT on a breakup valuation criteria a breakup, if it were to make it through an appeal, would be executed three or more years from today, which is an eternity in the Internet-centric world. The legal overhang appears to be lengthening, unfortunately, for Microsoft.
Chris Shilakes
With the stock trading at premium multiples and momentum investors exiting the stock, it may take some time ... to re-establish an upward trend.
Chris Shilakes
On calendar year 2000 revenues, this would yield a 387.9 billion market cap, or 70 per share. This is right in line with current trading levels.
Chris Shilakes
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