For INTC, The Glass Is Half-Full, For HWP, The Glass Is Half-Empty

  • June 6, 2001
  • Jon Najarian

We have two distinctly different views of the
world from two of the world’s largest technology companies. The fact that one
is listed on the Naz and the other on the big board would seem to have little to
do with how the markets are reacting to their vastly dissimilar outlooks, but
nonetheless, the Blue Chip Dow 30 index is tanking along with the listed
stock’s warning, while the Naz is hanging tough with the rosier outlook by one
of its key components.

The market was in trouble from the moment the second-biggest computer maker, Hewlett-Packard

(
HWP |
Quote |
Chart |
News |
PowerRating), warned that it is more cautious about Q3 sales and profit
forecasts, as it sees a global economic slowdown reducing demand. Even though
HWP has been cutting costs aggressively, they haven’t been doing it fast
enough to please the harsh taskmasters on the Street, as shares have fallen from
$38 at the end of January, to just $28.80 this afternoon.

Meanwhile the world’s largest semiconductor maker, Intel

(
INTC |
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PowerRating), saw fit to let its Executive Vice President toss some emphatically
more bullish comments to an audience in Frankfurt last night. Paul Otellini said
the chipmaker would be able to ride out the downturn without making further job
cuts. Additionally, Mr. Otellini said Intel would maintain its market share at
80% and that AMD was its only serious competitor.

The bears clearly were hoping that the chipmaker would take such an opportunity
to warn analysts ahead of tomorrow’s meeting. Instead, INTC is pounding its
chest telling the world they are a “very rich company” and that the recent
downturn has created buying opportunities for companies like INTC to take
significant stakes in emerging tech companies. My guess is that the glass is
half-full from INTC’s vantage point.

Likewise, the action in INTC options has been bullish, as both actual and dollar-weighted measures are showing money flowing into calls rather than puts.

Symbol

 Call

Volume

 Put

Volume

 $W

Call Vol

 $W

Put Vol
INTC

 58,607

 12,159

 85,135

 15,259

(1010WallStreet.com has licensed
the use of Hamzei Analytics proprietary options analytics)