Dell Well Positioned For The New Tech Environment

If technology is becoming a commodity, then Dell may be the best-positioned tech company of them all.


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If technology is becoming a commodity, then Dell may be the best-positioned tech company of them all.

In an environment where price has become a top priority, Dell's first-rate execution is enabling the company to grow far faster than the rest of the field. Global shipments were up 29% in the first quarter - while the rest of the industry suffered a 1% decline - and server shipments grew four times faster than the industry average. Storage revenues, a small but growing part of Dell's business, surged 65%.

If Dell's entry into the printer business goes as well, HP will have its work cut out for it.

DELL stock fell 3% on Friday because its results and guidance merely met expectations. Salomon Smith Barney downgraded the stock based on valuation.

As we said last night, the stock is overvalued, perhaps by 20% or more. But Dell may be the one company where a little irrational exuberance is justified.

The broader market fell on mixed economic reports: falling consumer prices, disappointing housing starts and a weaker than expected semiconductor book-to-bill ratio, but Michigan consumer sentiment came in better than expected.

The Nasdaq fell 12 to 1538, the S&P 500 slipped 2 to 944, and the Dow lost 34 to 8678. Volume rose to 1.5 billion shares on the NYSE, but declined to 1.77 billion on the Nasdaq. Advancers led by a few issues on the NYSE, but decliners led 18-12 on the Nasdaq. Upside volume was 54% on the NYSE, and 42% on the Nasdaq. New highs-new lows were 244-3 on the NYSE, and 169-11 on the Nasdaq.

Overture soared 17% on praise from Yahoo - which also had some investors thinking "buyout." Yahoo tacked on 0.9%.

AskJeeves surged 11% on a deal with Google.

eBay faltered at the $100 level, but still managed a gain for the day.

Alcatel rose 0.7% on a router acquisition. Gartner, meanwhile, said the router market has stabilized, and that Cisco continues to dominate.

Microsoft slipped 0.85% on yet another security flaw.

RealNetworks slipped 1.25% on the resignation of the company's CFO.

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