Goldman Says Microsoft is OK, Part II
Earlier in the monht, in themidst of downgrades of 20-some software stocks, MSFT-axe Rich Sherlund noted that he'd visited Redmond and said "Microsoft is OK."
Now we get this:
We believe MSFT's quarter has been tracking within the range of expectations although Intel's mid-quarter update yesterday has raised concerns about the strength of PC demand. It is important to discern weakness in PC units from weakness in mix, pricing, and margins for Intel and also we believe MSFT had been more conservative in offering guidance to the Street than Intel had been. While we could certainly benefit from some additional new data points, we are inclined to believe that MSFT is still likely coming in the range of its guidance offered on the April (3Q) conference call.
In other words, it's about the units, not Intel (Or Dell, or anyone else in the hardware businesses) revenues. Microsoft's revenue depends on how many units these folks ship.
Pricing in the cynicism
A great observation (from Tero Kuittinen on realmoney.com) on both the Bush administration's cynical use of the war on terror and the market's building immunity to it.
This is a pretty exciting week. Independence Day is approaching and Bush ratings dropped by 7 points in the latest Gallup poll -- so of course we're going to get a series of hysterical warnings. But the markets seem to be gradually building up some resistance to this type of thing.
10:05:44 AM 
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