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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (50927)	8/21/2001 6:22:54 PM
From: Proud_Infidel	Read Replies (3) \| Respond to of 70976

Jacob, Further, I don't know how or even whether growth in data traffic translates into profits for any company. What!?!? It will translate into profits for AMAT. Chips are required at either end of a network to process the data, so an increase of data traffic will inevitably lead to an increase in the necessity for IC's. BK

To: Jacob Snyder who wrote (50927)	8/22/2001 7:25:54 AM
From: John Trader	Respond to of 70976

Jacob, Thanks for your thoughtful comments. I think your arguments make sense, however I still would like to know how fast data traffic is growing since this greatly affects many technology companies, almost all of them in fact. I am not surprised that these experts differ on the growth rates, but on the amount which they differ. Being off by about a factor of 4 is a huge discrepancy, and throws into question all the analysis done on this topic. For this reason, I did not analyze the article as carefully as you did. I guess I am taking all these estimates with a big "grain of salt" at this time. I agree that one can not translate growth in data traffic directly to revenues, but there is a connection. The growth in data "traffic" through chips has doubled about every 18 months over the past 20+ years (Moore's Law), and that has had a lot to do with the rise in stock prices for many companies, including AMAT. The consensus on data traffic growth has been very wrong before. I recall last September when it seemed everyone was bullish on optical networking stocks, and many of these are down to about 1/7 of their prior value now. If there comes a time when everyone is too bearish on data traffic growth, then there could a lot of upside for some of these stocks, the good ones that is. I realize that this is not a quantitative analysis here, but with the fundamental data being so vague, I don't see how one can run good numbers at this time on future revenue/earnings growth for such companies. I don't know the answers, but I am suspicious of the consensus on this question of data traffic growth, which seems right now to be too bearish. In my next post I will post a link to an article that argues that GLW is a good buy here. I find this argument interesting. By posting it here I am sure the arguments in it will be challenged. Regards, John