Jacob and Thread, I wonder if any of you can explain something to me regarding AMAT and the semi-equip industry. Friday we had Paul Meeks on CNBC Marketwatch announcing his play for the week is to short KLAC, mainly because of the INTC and Taiwan semi capex cutbacks. Today, in the Barrons Roundtable, AMAT is listed as a short.
Is it really that significant that INTC and this other company are planning to cut back capex semi spending this year? I thought it was more like as Morgan once said, a "flood" of orders once we emerge from this downturn. That implies companies are going to try to respond in real-time, and not stick rigidly to capex plans made at the begining of the year. Also, although INTC is AMAT's biggest customer (correct me if I am wrong), it is not the source of most of AMAT's revenue. Do the other semi companies tend to act like lemmings, following whatever INTC does? I wonder how this all worked out in previous declines, and if any thread members have any thoughts on this.
It seems to me that shorting AMAT here over a one year time horizon would be very risky as I don't see a real lot of downside potential to the stock, but there are scenarios that could provide quite a a bit of upside. Looking back at a long term chart, it certainly was not a good idea to be short AMAT on a long term basis. I think the Roundtable picks are for one year. Also, I think one could argue that the news is already in the stock.
John |
