MSFT could feel modest selling pressure in near-term following 'shock value' of DOJ's proposal that Microsoft be broken up into two separate companies.

We are leaving our fiscal 2001 estimates and $87 12-month price objective for Microsoft materially unchanged, following fourth-quarter results that were largely devoid of the drama of the past two quarters. Nonetheless, 'caution' remains the operative word from Microsoft management, as continued choppy monthly unit demand from business PCs and a deliberate, gradual ramp from Windows 2000 platforms and related applications hinders near-term growth.

We believe that Oracle shares, which closed Monday below $15, have limited downside and may move to near the $20 level over the next 12 to 18 months on a modestly improved earnings outlook and expanded [price-to-earnings] multiple, perhaps to the 38 to 40 range.

We expect Oracle could appreciate at a more tempered rate over the intermediate term as fourth-quarter ... license revenues were muted by sluggish database growth, with strong earnings-per-share upside on continued margin expansion.

Sally and I haven't broken down on this at all. It's a shock, but we had basically psyched ourselves up. We told ourselves if anything happened - if the hurricane came in - it's the will of God.

We remain cautiously optimistic on Microsoft as the company slowly transitions itself from its reliance on desktop software and continues to roll out its higher growth, server side software.