Eugene, here is what CEO Morgan thinks long term. From a story on him in the October, 1999 Worth magazine.
Message 11539232
<<
Morgan himself thinks total revenue for his industry will grow to $35 billion by 2003, driven by the proliferation of chips in everything from cellular phones to set-top boxes. Morgan expects Applied to capture as much as $12 billion of that total as it leverages the strength of its broad product line and extensive global-distribution and service capabilities. "It's like the pod-racing scene in the new Star Wars movie,? Morgan told an audience of institutional investors during his keynote address at a BancBoston Robertson Stephens semiconductor conference in San Francisco in late July. "Here we are in this little pod, powered with these enormous engines -- the Internet, E-commerce, games, new handheld computing devices -- all racing along. And our job is basically to hang on and try to maintain control as we rocket into the 21st century.?
With that sort of joyride in prospect, Morgan wonders when investors are going to value Applied Materials they way they do some of the market's other hot rods. Applied stock trades at 44 times estimated 1999 earnings of $1.61 per share -- not bad, but a far cry from AOL's multiple of 157 times 1999 earnings. "We think we kind of are a .com,? he says, "just nobody recognizes it. That's why we've always thought we were a little undervalued, on a relative basis. Whether it is Peapod, Amazon, Cisco, America Online, all this stuff is creating huge demand for chips, which we enable. Our key is to be sure we have significant market share in the processes that make chips possible, because someone is going to get that business, and we want it to be us.?
Michael Peltz is Worth's financial editor.
>> |
