Just about 18 months ago, AMAT was in trouble. It dropped from around $45 to $21. AMAT goes through this cycle every couple of years.
AMAT is one of the best managed companies, I think everyone should own some. However, I still believe its still too expensive (I probably am the only one out there).
Don't pay more than a P/E ratio of more than 25 with respect to current earnings. I never believed analyst when they expected earnings to almost double in one year, especially a large company like AMAT. Remember AMAT is still a high flyer stock and when it comes down, it comes down hard. Just look at its past.
AMAT is a great company, but I honestly feel it will go down to $25, before it moves up nicely.
take your pick: 18months ago or 3 years, the IC industry has been in oversupply...leading fabs are now all FULL. They need more capacity and hence, AMAT equipment. The cycle is just starting into full swing. This is a feast/famine industry. It's the capacity/investment cycle to look at not just where was an IC stock priced last year. Prev, the only full fabs were at Intel,; now only the bottom tier has idle fabs. (take a look at Ti stock...a little momentum happening there, it'll happen at AMAT).
Anybody have any thoughts on where this stock headed in the next 6 months? I'm curious as to a proper valuation based on something other than pure guessing. The P/E ratio in excess of 500 is starting to get worrisome, as are struggles of box makers, although chip stocks appear to be strong, currently.