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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Elmer Flugum who wrote (8903)	2/15/2004 5:26:27 PM
From: Cary Salsberg	Read Replies (1) \| Respond to of 25522

RE: "...report likely to highlight that the industry is likely to see only two more quarters of meaningful order growth." If the OCT 04 orders actually reach the $2,970M forecast, then orders would only need to increase an average of $203M per quarter for 10 quarters to get to the $5,000M ($20B annual rate) level in mid 2007. That is an order growth rate sequence that starts at 6.8% and ends at 4.2%. Those rates are not "meaningful" when compared to 36.7%, 28.6%, 20%, 10%, but revenue at that level is very meaningful and the duration of that revenue is key. If AMAT achieves an order rate close to $3B/quarter in this fiscal year, I would be pretty confident that it could hit $5B at the peak of the cycle. That should give a cycle price peak of $60. Again, we need to guage how customer's fab capacity increases as higher orders translate to higher revenues and new production equipment in place. Fab capacity increases verses chip revenue increases (end user unit demand) are always the key.