We believe that Intel is seeing the most front-end loaded third quarter in many years and is booked out for the quarter.

We believe that demand is now likely to exceed Intel's processor supply now through the third quarter and possibly into the fourth quarter.

We believe that Compaq also did a good job on the profitability front, which should enable operating margins to more than double from third-quarter levels ... this should lead to earnings-per-share at least several cents higher than the consensus First Call estimates of $0.16.

We remain negative on PCs and semis and believe there is still downside risk to estimates and stock prices.

Though we believe Dell can outperform the Nasdaq in 2000 after a poor 1999, we believe this can only happen after expectations have been reset to more reasonable levels. We believe downside on the stock is to the high $30s. We remain on the sidelines until then.

As a result, we believe forward EPS estimates at best will remain unchanged and most likely will need to be lowered.