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Technology Stocks : Semi Equipment Analysis
SOXX 296.74+1.8%Nov 28 4:00 PM EST
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To: Donald Wennerstrom who wrote (10438)7/6/2003 10:09:46 AM
From: Kirk ©  Read Replies (1) of 95487
 
Here is another question to ask and understand. I'll put my 2¢ out for others to tear apart or add to.

Why is AMAT still seeing negative growth while LRCX is growing revenues?

I own both.

AMAT is a much larger and "older" company so it has much more "installed base."

A significant percentage of AMATs revenue (compared to the smaller companies) comes from servicing and supplies for equipment already installed. If that equipment is going obsolete faster than the demand for new equipment, then it will see declining sales while a company like LRCX with much less service revenue will see growing revenue sooner.

AMAT most likely has much, much more advanced process revenue than LRCX but it is canceled by declining revenue for stuff going obsolete. This will eventually change, but it is delayed vs LRCX. This is probably why the smaller companies lead the larger companies in the US for other sectors, not just the semicapx sector.

I've been thinking and your charts confirm that the wise move for me might be to buy companies like LRCX and UTEK near the bottom as I did and then roll SOME of my profit taking dollars into the larger companies as the economy gains steam. This makes sense also since the "regular folks" are much more likely to buy stocks that advertise on TV like AMAT and DISNEY vs LRCX or UTEK. (those AMAT adds could pay off someday... man whomever made the decision to spend that money should be fired or retired!)
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