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Politics : Formerly About Applied Materials

AMAT 327.31

+8.4%

9:53 AM EST

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To: Pink Minion who wrote (39727)	11/15/2000 9:20:56 PM
From: Cary Salsberg	Read Replies (1) of 70976

AMAT is a great company, the priemier semi-equip company, but it doesn't operate in a vacuum. Their report reflected a continuation of the business up cycle until, I believe, it will hit an earnings and revenue peak in 2002. Technology stocks have been in a bear market because of the high stock valuations last spring and the economic slowdown which is being engineered by the feds interest rate hikes, oil price spikes, and the deflation of the dot.com bubble. AMAT's customers are seeing a slowing in their business and this will probably last 3-6 months while the economic slowdown is factored into new lower production rates. AMAT provides strategic capital equipment, so their short term business slowdown will not be as severe as their customers and sales will rise slowly through 2002. AMAT is in a CYCLICAL growth industry. Morgan has made revenue predictions in the past. He is reasonably accurate, but he misses the intervening down cycle. AMAT may hit $5-6B sales on the way to $20B 3-5 (or 4-7) years out. Investing in AMAT short term is risky. The bear market made a new low this week and a retest is almost certain. While AMAT has limited downside risk, any significant upside must be squeezed between the end of the current bear market and the end of the semi-equip up cycle. Barring the market bubble which ended in March, I believe the high for AMAT would have been $90 in the summer of 2001. I certainly believe that, except for buy and hold investors, AMAT should be sold in the $75-90 range if we are lucky enough to get there.

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