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

To: Cary Salsberg who wrote (9842)	5/19/2004 10:09:10 AM
From: Proud_Infidel	Read Replies (2) \| Respond to of 25522

Cary, I am curious if you have any estimates for what IC revenues will be for your model, and thus capex? Are you assuming $250B etc for CY07 in IC revenues? I have a difficult time beliving that IC revenues will not be substantially higher than 2000 with the penetration into all consumer gear, and the TFT phenomenon......I assume that you heard how strong the TFT biz was for AMAT with orders well into 05? $2.50 in EPS is much more than they earned in 2000, so I am curious where you see IC Revs? TIA Brian

To: Cary Salsberg who wrote (9842)	5/19/2004 4:29:26 PM
From: Sam Citron	Read Replies (1) \| Respond to of 25522

Cary, Merrill forecasts $1.25 EPS for CY05. My model calls for $2.50 EPS in CY07 and a peak price in CY06 of $50. You seem to be focusing more LT and Merrill ST. Do you have an EPS forecast for CY05 and 06 and does Merrill have one for CY06 and 07? At what point do you envision the 10 analysts who currently have hold ratings on AMAT moving over to buy ratings instead? The best model for the collective wisdom about the semi industry is the voyage of Columbus. It is moving toward rich rewards, but, at any time, it might fall off the edge. The voyage of AMAT has already been immensely enriching for long-term investors. Do you get the sense that the collective wisdom of the street is either not focusing on the long term, or that it thinks that the best years of the journey lie behind it instead of ahead? As for the "edge", are you saying there are no more sharp edges as there were in the past, or simply that the edge is further away than it appears to most observers? What are the pricing implications (for AMAT shares) of diminishing cyclicality? Might it be useful perhaps to look at other industries, such as the housing industry or HDD industry, that have gone through or may be going through a similar transition toward greater stability? Sam

To: Cary Salsberg who wrote (9842)	5/19/2004 8:02:57 PM
From: Sam Citron	Read Replies (1) \| Respond to of 25522

Merrill forecasts $1.25 EPS for CY05. My [extrapolation]model calls for $2.50 EPS in CY07. How did you determine that EPS would double between CY05 and CY07? That would indeed be a nice 5 year string of uninterrupted growth. From 1991 to 1996, AMAT grew EPS consistently at .02, .03, .08, .16, .32, .42, so it would not be all that unusual. I don't think the 10 analysts will move to buy. But your model assumes continuing robust growth in CY06 and 07, while theirs seems to assume a decline starting in 1Q06. Wouldn't they be forced to move to a buy as they saw that the edge was not nigh after all? Your mention of housing and HDD as possible comparisons for AMAT provided an almost ROFL! I was not really comparing AMAT to a housing or HDD stock. I was merely thinking of how investors respond when an industry has been cyclical for a very long time and then begins to show signs of stable growth. In the case of housing stocks, for example, it does not seem to have helped their PEs, although the rise in EPS has been so dramatic that it has caused a rapid rise in the stocks nonetheless. Sam