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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (92309)	1/15/2003 1:28:44 PM
From: tejek	Respond to of 275872

Intel's Margins Underscore Its Franchise Strength Page 2 Bears also will say that Intel's planned lower capital spending is a negative because it reflects less optimism about the future. But what it really says is that Intel has enough plants for growth of output, and now depreciation charges will start to decline, which helps earnings. For the semiconductor-equipment companies, lower capital expenditures is a nonevent and should not be a reason to sell those stocks (those who did after hours will eventually regret it). In fact, Intel's capital spending on actual production equipment probably will be up 20%; it's the spending on land and buildings that will be down. And as far as I know, Applied Materials (AMAT:Nasdaq - news - commentary - research - analysis) doesn't sell buildings. Anyway, it's irrelevant because equipment stocks track semiconductor stocks, and investors expect their earnings to lag the cycle. Obviously, a better outlook for Intel has to be good for Applied Materials. The market always looks ahead. That is the problem with the bear case: It has failed to anticipate change, and has used current trends last fall to support a negative view when indicators of impending improvement were developing. I base my bullish long view on the fact that semiconductor usage always grows. What creates problems are recurring inventory cycles that come along when producers least expect it. Those inventories are gone now and demand is picking up for PCs, cell phones and even telecom equipment. To me, the outlook for the PC sector is bright. This should lead to better times for lots of tech companies, not just Intel. I don't see much analysis of the fact that the U.S. won the PC war, and now it's a U.S. oligopoly made up of Hewlett-Packard (HPQ:NYSE - news - commentary - research - analysis), Dell (DELL:Nasdaq - news - commentary - research - analysis) and Apple (AAPL:Nasdaq - news - commentary - research - analysis). The Japanese have no real position. Price wars don't help gain share like they did before. And surveys show that consumers still rely on their PCs more than any other tech product, including cell phones.