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

To: Proud_Infidel who wrote (20860)	10/13/2006 11:43:02 AM
From: niek	Read Replies (1) \| Respond to of 25522

re: They simply cannot live with positive news, unless it pertains to Google, oil stocks or any of the large, old economy stocks. There, fixed it! We were talking about chips here, didn't we?..:)) Ok, again, they simply cannot live with positive news from the semiconductor sector.:)

To: Proud_Infidel who wrote (20860)	10/14/2006 12:57:44 AM
From: etchmeister	Read Replies (1) \| Respond to of 25522

They simply cannot live with positive news. The Market always overreacts - I believe after Y2K (and the chip crash) it was vey popular to make a bearish case. Though it might have been justified being bearish after the crash it became a "routine pattern" ignoring the (positive) changes in "fundamentals" - maybe (though I'm not counting on it) we are about to see a change in sentiment towards chips (bold statement - I suppose) but considering we are moving into a soft period coupled with negative PR from option scandle chips are doing pretty good. Here's the flash back Wall Street Still Loves Chip Stocks By Monica Rivituso Published: October 18, 1999 3:15 PM Click here for more stories by Monica Rivituso. SmartMoney TV Related Quotes XLNX 24.87 Up0.11 0.44% MU 15.06 Down-0.07 -0.46% LRCX 51.66 Up3.27 6.76% More Breaking News FCC Delays Vote on AT&T Merger GE Matches Forecasts, Economy 'Solid' Microsoft: Vista on Track After Changes Consumer Sentiment Extends Recovery Retail Sales Slip on Cheaper Gasoline SAIC Scientists Score Wth Hot IPO U.S. Rep Pleads Guilty in Lobbying Scandal Bush Signs Ban on Online Gaming Transfers More... Advertisement Email This Story Email This Story Print This Story Print This Story Add to del.icio.us Add to del.icio.us Save This Story Save This Story Send Us Your Comments Send Us Your Comments digg it Digg it Get News Alerts Add this column to your News Alerts (New!) RSS Feeds CHIP STOCKS have sustained as many blows as any technology sector today, but don't blame the analysts. In the wake of Intel's (INTC) disappointing report last week, Wall Street released a flurry of positive chip and chip-equipment research this morning, suggesting that any bruises sustained today may fade quickly when the general market mood improves. Take Xilinx (XLNX). Merrill Lynch is talking up the programmable logic device maker, saying the stock could double in the next two years. (Programmable logic devices are chips that can be programmed by customers to perform specific logic functions.) Analyst Eric Rothdeutsch says new products and the ongoing cyclical upturn should boost the stock to between $130 and $140 over the next two years. He predicts revenue and earnings will grow at least 25% annually over that time. Rothdeutsch said it helps that the chipmaker gets the bulk of its revenue from the fast-growing communications industry, considered to be the fastest-growing area within the semiconductor industry. The introduction of its latest high-end product family, Virtex, has been flawless, Rothdeutsch noted. And all this is occurring at a time when the semiconductor industry is shaking off its three-year downturn and heading strongly into a multiyear upswing. Chip demand should increase by 16% this year and by 18.5% next year, according to Merrill's stats. Meanwhile, Daniel Niles, a Wall Street Journal All-Star analyst at Robertson Stephens, raised his earnings estimates on Micron Technology (MU). He issued an upbeat note following a marketing trip with the company last week. Contract prices (prices that companies like PC makers secure for a specific number of chips) for dynamic random access memory (DRAM) chips are heading toward $11 a chip, Niles said. What's more, the extra memory needed for Microsoft's (MSFT) new Windows 2000 software should compensate for any PC unit shortfall, he said. Niles upped next quarter's earning estimate by 41 cents, to $1.07 a share, and next year's by 80 cents, to $5.05. The chip-equipment side of the industry is also hitting its stride, analysts say. Novellus (NVLS) started the industry out with strong earnings and new orders, and the Street is expecting more. "In our view, we are likely to see continued good numbers at, or exceeding, the high-side of the range of estimates, said Bear Stearns analyst Robert Maire in a report today. "[The Sept. 20 earthquake in] Taiwan has proven to be an absolute non-event to the equipment industry." All eyes will be on Lam Research (LRCX) and Teradyne (TER) this week. "We would expect Lam to be the beneficiary of the same momentum that Novellus, Advanced Energy (AEIS) and KLA-Tencor (KLAC) reported," Maire said. He added that Lam has been rolling out several new products and seems to be gaining market share. He's particularly impressed with the company's new "Excelan" etch product. "If the rest of the market were in decent shape, the equipment stocks would likely be halfway to the moon by now," Maire said. "But we'll just have to settle for decent performance. As earnings continue to come in, we expect relatively little downside but some occasional selling into the strength of the earnings numbers." SG Cowen analyst Tia-Min Pang agrees that earnings are shaping up nicely for the chip-equipment group. More importantly, he sees several catalysts continuing to drive the sector. He sides with those who think that capacity at chip-fabrication plants is stretched to the maximum, which means that chipmakers are going to have to start putting some serious money into new equipment. In addition, several new technologies, such as mixed-signal and system-on-a-chip, are spurring demand for new equipment. Chip companies are also trying to make chips using copper circuitry instead of aluminum (because it's a faster and cheaper material) and they're shifting to smaller circuitry. Both trends are driving demand for more precise testing tools. "Going forward, we see continued fundamental strength across the equipment universe," Pang wrote. "Short-term issues such as Y2K and seasonality may affect stock performance, but any weakness should be considered a buying opportunity."