Shlomi Cohen, Globes: Have faith in EZchip despite lower guidance
EZchip Semiconductor Ltd. (Nasdaq: EZCH; TASE:EZCH) is one of the most promising high-tech companies to emerge in Israel in the past decade, and about which we will hear much more in the coming decade.
Yet to read headlines in our papers after the company published its financial report for the second quarter and lowered its guidance, it is possible to imagine that the company’s end was near. “EZ come EZ go” was one headline, after the company’s share price fell 25% following the results and lower guidance.
“The 25% fall reminds us just how risky blind faith in technology stocks is,” said the paper to thinking readers. “Blind faith in technology stocks” is an archaic phrase from 12 years ago. Since then blue-chip stocks, such as Lehman Brothers, Citigroup Inc. (NYSE: C) and American Insurance Group Inc. (NYSE: AIG) have fallen by up to 99%, not to mention real estate companies, which are easy to understand and physically feel their assets, such as Africa-Israel Investments Ltd. (TASE:AFIL) and Delek Real Estate Ltd. (TASE: DLKR).
No need to get excited about lower guidance
In contrast to Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX), which I will presently return to, EZchip is very easy to understand, and there is no need for blind faith. I can place a reasonable bet that the abovementioned writer used EZchip processors for his content to reach targets throughout the Internet, because they are the brains that drive routers made by Cisco Systems Inc. (Nasdaq: CSCO), Juniper Networks Inc. (Nasdaq: JNPR) and other companies, just like Intel Corporation’s (Nasdaq: INTC) processors run the content on PCs and laptops.
Fortunately there is George Gilder, the American Christian technological guru that visits here every six months and reminds us how we are the champions and deserving of a gold medal when it comes to public and private technology companies. Gilder was in no way perturbed by the sharp lowering of EZchip’s guidance. After all not a single customer has left and no real competition is on the horizon, while Cisco, its largest customer and industry leader is broadening its cooperation with company to more platforms…Read More>>
