A friend forwards amusing commentary on the market’s jubilation about tech stocks these days:
So let’s see, with regard to real tech end demand, I see what all the excitement in EPS season is from and why everyone is massively overweight tech:
- the industry is massively short capacity (they can never raise capital),
- there are no deflationary forces (virtualization, Moore’s law, 8x capacity from Nehalem to name a few),
- there is no competition (cell phone mfgs now targeting aggregate 200% smartphone market share), and
- demand is infinite and not sensitive to employment (PCs and servers and networking gear now being installed in empty seats just for fun and to waste electricity).
Thusly the results so far:
ACER (#2 pc mfg in world) drastically lowered Q4 revenue guidance to flat because they overfilled the channel (not mentioned by sell side)
GOME the Best Buy of China just came out and said PC and handset demand is slowing (amazing how the sell side buried that piece of news as well)
Meanwhile, the word on Intel’s fan-fracking-tastic quarter is that it was mostly channel stuffing: PC makers loading up in preparation for a boom in Windows 7 demand.
But no worries. All smooth sailing from here.