Replies to post #308525 on Zeev's Turnips Patch-No Politics (ZEEV)

[Cincy Trader]

Yep, looks like any worries we may have had are gone now.

[marketmaven]

Intel: A growth machine no more
By John Shinal
Last Update: 2:46 PM ET Oct. 12, 2004

SAN FRANCISCO (CBS.MW) -- Tech investors who haven't noticed that the growth torch has passed from middle-aged companies like Intel to Yahoo and other upstarts may want to take a close look at the firms' third-quarter earnings reports. Both will report after the close of trading Tuesday, and the growth comparison will be stark.

Yahoo's (YHOO: news, chart, profile) quarterly revenue is expected to rise more than 80 percent from a year ago, while Intel will likely post annual growth in the high single digits. Looking past this quarter is even more instructive.

Analysts expect Intel's 2004 sales to be $33.7 million. In 1999, near the height of the last growth cycle, the company's annual revenue was $29.4 billion. So if Intel (INTC: news, chart, profile)hits its number this year, it will have posted a five-year average annual sales growth rate of - drum roll, please -- 3 percent.

Yet many on Wall Street - especially those who made big money on tech stalwarts like Intel, Cisco Systems (CSCO: news, chart, profile) and Sun Microsystems (SUNW: news, chart, profile) during the last bull market -still believe those companies will lead the next leg of the tech growth cycle.

But the long history of U.S. markets, like the recent history of Intel, doesn't support that thesis, according to one fund manager. "In tech, it's all about the new supplanting the old," said Kenneth Broad, who co-manages $1.1 billion in the TransAmerica Premier Growth Opportunities Fund. The key word in that quote is "old."

Although Intel is arguably one of the most successful innovators in U.S. corporate history, it began making semiconductors the same year Richard Nixon first won the White House. So while Intel's business depends on being innovative, it is nevertheless an old - and mature -- business. Some industries move slowly enough so that one firm can dominate for decades - think Coca Cola in retail. Yet tech firms tend to get put out to pasture at a relatively young age, Broad said.