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Applied Materials just announced a 1.9 billion sale of equipment for multiple solar factories to be constructed by the buyer. I bought AMAT early in SLO1, and still hold it, based in large part on its potential in solar.
The thinking was, that AMAT has huge resources in terms of capital and R&D to bring to bear on the solar field. An investment in AMAT is more attractive than multiple investments in IPOs or high priced popular Chinese Solar stocks which is kind of a guessing game who the winners will be.
It's like the California gold rush, the people who made money were those who sold to the miners, picks and shovels, blue jeans (Levis), etc. AMAT supplies the factories for the solar gold rush, very similar to what they have been doing in the semiconductor industry and the flat panel (TV) industry.
The 1.9 billion would be an additional 20% of their TTM sales. It will take a while to be delivered and accepted, but the stock price should increase as the market starts to price the growth in solar into the stock. The last earnings conference call featured quite a bit of enthusism about solar, assertions that it is "ramping." 1.9 billion sounds kind of rampant.
AMAT is up 4 or 5% on the news. There is no need to rush, given this will take years to play out, but I will hold my position and look to add to it. With the stock at 19.xx today, I think it has 35 in it somehwere in the next year to two years.
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Comments (1)
Sounds like a good call. I thought I heard they were likey to get more business soon as well (Spain's new government or something?) Those solor stocks just scare the begeezus out of me.
Posted by Uncle John | March 11, 2008 1:55 AM