re: Orders at the top - Price is at the bottom - Go Figure
Well............. if this is the top for orders (implying that they will now be going down), then it makes sense that some smart people have anticipated it, and sold the stock. The chart for bookings does look like a "rounded top". Some downturn in orders is anticipated, the question is how much. At best, we are in for an extended period (through 2001) of bookings in the 2.5-3.0 Billion range. The BTB will go to 0.9-1.0, as billings catch up to a flattening-to-slightly-down bookings graph. Bookings will be up one month, down the next. At worst, bookings will descend sharply, going down month after month for a 12-month period (that hasn't started yet), bottoming out around the 1.5B area (which was the 1996 and 1997 top, and the area where bookings stalled for a while in mid-1999, indicating a possible "natural landing place"). I don't think, even worse-case, that bookings will go much below 1.5B, as I think the technology purchases have to continue in this downturn (in contrast to the 1998 downturn). Lots of semi companies have excellent balance sheets, lots of profits have been made in the last few years in semi-land, and so they can continue to buy from AMAT. |
