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The 25 best tech stocks
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May 17, 2000: 1:02 a.m. ET
Fund managers disclose top tech bets for 2000, warn wild upside is gone
By Staff Writer Alex Frew McMillan
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LAS VEGAS (CNNfn) - Want to know what stocks some leading technology fund managers are buying these days? Eleven hundred individual investors who attended the "Best Technology Stocks for 2000" luncheon of the Money Show at Ballys hotel and casino certainly did.
Here's what they heard as five portfolio managers and stock pundits gave their top five tech-stock picks for 2000:
Ken Kam
Marketocracy CEO and portfolio manager of the Ingenuity Capital Management Medical Specialists fund
Not surprisingly given his fund focus, Kam is strong on biotech, with the human-genome project nearing completion. Celera (CRA: Research, Estimates), which is finishing the gene sequencing this year, could be the Microsoft of biotech. The sequencing amounts to "the operating system for human existence," he said.
If Celera is the Microsoft, Affymetrix (AFFX: Research, Estimates) is the Intel, he continued. Its technology helps use gene mapping to mold medicine prescriptions for individuals that might even prove dangerous for other individuals, he said.
Kam's top picks:
1. Affymetrix (AFFX: Research, Estimates)
2. Celera (CRA: Research, Estimates)
3. Amgen (AMGN: Research, Estimates), which he feels will overcome its patent-challenge problems
4. Sepracor (SEPR: Research, Estimates), an "old story just coming to fruition," that develops second-generation drugs and markets them through the first-generation maker.
5. Novoste (NOVT: Research, Estimates), which he helped found and which has a catheter to help in angioplasties.
Kevin Landis
Co-founder and portfolio manager of the Firsthand Funds
Landis, whose offices are in Silicon Valley, founded the Firsthand Funds with Kam (above) and now manages them, focusing on high-tech. He used to be a high-tech analyst at Dataquest. His top pick, Wind River Systems (WIND: Research, Estimates), has what he hesitated to call an "emerging monopoly" on embedded operating systems, the operating systems that run antilock-brakes for cars or climate-control systems for buildings. Digital Microwave (DMIC: Research, Estimates) stands to benefit from the push toward low-cost radio antenna technology, he said.
Landis' top picks:
1. Wind River Systems (WIND: Research, Estimates)
2. Digital Microwave (DMIC: Research, Estimates)
3. Corning (GLW: Research, Estimates), which he said he changed his mind about when he realized how aggressive "Glassworks" was being in buying and building fiber-optics business, and which he thinks will have blue chip status by year-end
4. Finisar (FNSR: Research, Estimates), which only went public last year but he said has a lot of potential making its modules, buying from companies like JDS Uniphase and selling to companies like Northern Telecom
5. Globix (GBIX: Research, Estimates), a Web hosting company that he said appeals most out of its peers on a valuation basis.
Michael Murphy
Editor of California Technology Stock Letter and Technology Investing
The newsletter editor also runs an investment-advisory company that specializes in tech investing. He is also chief investment officer of the three Murphy New World funds. His top pick was Blaze Software (BLZE: Research, Estimates), a company that makes software so other companies can make complex changes to their Web sites without having to take them down. Even food companies like Kellogg and General Mills will have to fight to develop a competitive Web strategy, so Blaze, which went public in March, will gain there, he said.
Murphy's top picks:
1. Blaze Software (BLZE: Research, Estimates)
2. Persistence Software (PRSW: Research, Estimates), another company like Blaze that performs "dynamic caching"
3. LSI Logic (LSI: Research, Estimates), which he pointed out is close to 50 percent off its high and which has parts in many chips, such as in every Playstation 2
4. Geron (GERN: Research, Estimates), because Murphy said he wanted to pick a biotech stock - like Celera, it is tackling human-gene mapping
5. Microsoft (MSFT: Research, Estimates), which he said is just cheap right now given its fight with the Justice Department, making it the most depressed of the New Chips like Intel, Oracle and Sun Microsystems
Garrett Van Wagoner
President and portfolio manager of the Van Wagoner Funds
Van Wagoner said he hesitates to recommend specific stocks on occasions like this. He worries that investors will run off for a year on hot tips he might change his mind on after a few months. But the media and investors want stock picks. With that caveat, he said Ariba (ARBA: Research, Estimates) was his favorite tech stock this year. The business-to-business e-commerce it does was once the business everyone wanted to invest in "and now is the business no one wants to invest in," he said. He said he wasn't put off by the TV business media badmouthing B2B.
Van Wagoner's top picks:
1. Ariba (ARBA: Research, Estimates)
2. Netro (NTRO: Research, Estimates), which he said he likes for its OEM agreement with Lucent and its "point to multipoint" wireless telecommunications equipment
3. Interwoven (IWOV: Research, Estimates), another "dynamic caching" or "change-management" software maker that lets companies change their Web sites on the fly
4. Sun Microsystems (SUNW: Research, Estimates), because he knows many investors want a big-tech stock pick, though he worries Sun is getting long in the tooth
5. Broadcom (BRCM: Research, Estimates), which he said will gain from the blossoming market for broadband communications
Alberto Vilar
Amerindo Investment Advisers president and portfolio manager of the Amerindo Technology Fund
Vilar, who manages $8 billion in the fund after it grew 250 percent last year, said tech stock prices now will look like they were at fire-sale prices in two to three years. Vilar, who is a big opera buff, also likes Ariba (ARBA: Research, Estimates) as his top pick, for its B2B software infrastructure. Because the global telecommunications system needs to be rebuilt for optical networking, his next selection is Sycamore Networks (SCMR: Research, Estimates). "It's in the sweet spot of optical networking, a major player there," Vilar said. If he got a sixth pick, since he and Van Wagoner both went for the same stock, it would have been Web-hosting company Exodus, he said.
Vilar's top picks:
1. Ariba (ARBA: Research, Estimates)
2. Sycamore Networks (SCMR: Research, Estimates)
3. Akamai (AKAM: Research, Estimates), which helps with content distribution on the Web, where the opportunity is great because Web information "is truly complicated to manage," he said
4. VeriSign (VRSN: Research, Estimates), which Vilar said is the premier company in Internet security
5. Priceline (PCLN: Research, Estimates), because it's "probably known to everybody" and will be moving into many more products than the airline tickets, hotel rooms and groceries it already offers to sell online.
* Disclaimer 
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