'COMPANIES WITH PROFITS DRIVEN BY THE INTERNET WILL CONTINUE TO DO WELL'
Kevin Landis co-manages $225 million in four technology funds run by Firsthand Funds Inc. in San Jose, Calif. His Technology Value Fund is up 4.6% through June 2. It had a three-year average annual growth of 43% through Apr. 30.
ON WHETHER TECH-STOCKS WILL REBOUND
"Tech stocks should outperform the market this year. Companies with profits driven by the Internet will continue to do well. The PC market is softer than people thought. In semiconductors, it depends where you look. I'm optimistic about the capital equipment side, but I'm concerned that people expect a bounceback but won't have the patience. It will come in Q4--or in Q1 of 1999."
ON WHEN SEMICONDUCTORS WILL RECOVER
"The oversupply of DRAMs [memory chips] is real. But Intel (INTC)
will surprise people by how competitive they can be at lowering prices. Intel is one of my biggest positions, but it's not a Q3 or Q4 play. Their next explosive move will be with Merced, and the delay is a reason to be less excited about the stock. But it's a franchise cmpany, and boy do I feel safe owning that stock. Companies that sell specialty chips to boost Internet bandwidth remain healthy."
WILL ANTITRUST SUITS HURT MICROSOFT AND INTEL?
"A delay in Windows 98 could be an additional reason for consumers to delay buying a PC. I'm not particulary worried about a suit against Intel. They're a powerful company with excellent technology, and they're going to be a leader in their industry for a long time to come."
HIS FAVORITE SECTORS
"The story in the second half is not computing, it is connectivity and the Internet. [Higher PC demand] requires some new technology or application to get excited about, and I'm not sure I see it in the second half. The average PC user is more likely to get excited about a faster modem than a faster PC.
Anyone who builds Internet infrastructure has a tremendous opportunity. Some companies in this business are already richly priced, such as Advanced Fiber and Tellabs (TLAB). Some Internet stocks are very pricey and are trading on promise, not skepticism. It's much safer not to invest in [those] Internet stocks. I prefer companies that make chips that expand bandwidth, such as PMC Sierra (PMCS), Vitesse (VTSS), and Level 1 (LEVL). I'm also looking for good companies working on building the wireless infrastructure."
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