Investing in companies in cyclical businesses can be frustrating on many levels, not the least of which is waiting around for the recovery. Investors in Applied Materials (NASDAQ:AMAT) have seen the stock of this semiconductor equipment giant do a whole lot of nothing for about a year as the company waits for the eventual turnaround in equipment demand.

With the reporting of the company's fiscal third-quarter earnings, the recovery isn't here yet, but management guidance appears guardedly optimistic. Revenue was down 27% from last year and earnings dropped 16% as the chip capacity glut continues to limit demand for new gear.

As for order flow, the company saw orders drop 40% from last year's level and 5% from the prior quarter, and the backlog shrank more than 8% sequentially. Among those orders that the company did get, two were worth more than $100 million, and Asia continues to represent the bulk of the company's business.

Of course, Applied Materials is not alone in its experience. Other equipment companies, like KLA-Tencor (NASDAQ:KLAC), Lam Research (NASDAQ:LRCX), and ASML (NASDAQ:ASML), have posted modest results as big chip companies and foundries have looked to hold off on new equipment purchases until capacity utilization picks up.

It does now appear, though, that business may be about to pick up. When I coveredTaiwanSemiconductor (NYSE:TSM) last month, management suggested that capacity utilization was reaching the 90% threshold -- a break-point considered to be a sign of healthy demand. Elsewhere, LCD manufacturers are starting to see better pricing and are spending more on capital equipment, and there are early hints that the telecommunications sector may be emerging from a long hibernation.

If this all comes to pass and semiconductor equipment makers have another run, investors should try to remember the cyclical lesson. Just as some analysts who've been wrong on oil for over a year are now capitulating and projecting high prices for a long time to come, optimism will abound at the peak of the next semiconductor cycle, and we'll all hear about how "it's different this time."

Don't fall for it.

Applied Materials is a good company and can make investors money, but it is a cyclical business. Unless Fools want to ride the ups and downs for long stretches of time, this is definitely a stock that is bought to be sold.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).