We upgraded Compaq because we see clear signs of a turnaround beginning to gain traction with good pick-up in business momentum.
The reason we are optimistic about IBM's prospects is that with the worst very likely behind it - Y2K freezes, the problems in the HDD business and slump in services revenues that impacted 1Q00 - second-half 2000 is likely to turn up strong for IBM.
While the earnings-per-share outlook was inline with expectations, Network Appliance provided a positive revenue outlook for the fourth-quarter with IBM business just beginning to ramp.
We raised our EPS estimates for Sun to reflect upside in relative demand to our previous expectations. Sun management indicated that demand trends were ahead of its expectations ... and that business halfway into the quarter was very strong across the board.