AMAT surges as Street applauds outlook; KLAC, LRCX also gain

Applied Materials'  (AMAT +6.3%) FQ4 guidance demonstrates its business is less cyclical than that of rivals KLA-Tencor (KLAC +1.4%) and Lam Research (LRCX +1.5%), argues Nomura. Whereas AMAT is guiding for flat Q/Q Oct. quarter revenue, KLA and Lam (more dependent on big foundry orders) are respectively forecasting 16% and 8% drops before expected rebounds.

Nomura is also a fan of AMAT's strong Chinese display equipment exposure, and notes overlap with merger partner Tokyo Electron's (OTCPK:TOELF +5%) display ops is low.

Jefferies echoes Lam Research's management (previous) by predicting technology inflections such as "a faster-than-expected 14nm FinFET ramp and a shift to flexible OLED by Samsung" will act as catalysts for AMAT over the next 6-18 months.

Credit Suisse is more cautious: It likes AMAT's margin improvement, share gains, and exposure to display/solar recoveries, but also considers Lam a better play on investments in FinFET (3D transistors), multi-patterning, and 3D NAND flash. AMAT gets ~40% of its chip equipment revenue from chemical vapor deposition and etching products (account for a large portion of spending on cutting-edge processes), while Lam gets ~90%.

From other sites
Comments (3)
  • King Rat
    , contributor
    Comments (1902) | Send Message
    AMAT seems to be doing everything right and making me wonder what I was thinking when I sold a while back. It is like breaking up with somebody who transforms the next day into an awesome person and leaves you asking yourself, "was I holding them back the whole time?"
    Congratulations, AMAT, congratulations.
    15 Aug 2014, 08:01 PM Reply Like
  • Nick_In_Detroit
    , contributor
    Comments (24) | Send Message
    Just filling the gap in the trendline. BTW: That gap was from news of Peking being disgruntled with the Tokyo Electron merger. When the folk in Peking accept the deal the stock will continue its upward trend.


    BTW: I'll start calling Peking by its newer (1984 plus) name as soon as my favourite Chinese restaurants change the names of my favourite dishes!


    Also: I have been trading AMAT in my Roth account with success on volatility. I am also long $25 Jan 2016 Calls in my cash account. Good money here!
    15 Aug 2014, 09:55 PM Reply Like
  • alpine
    , contributor
    Comments (2144) | Send Message
    While all this talk is about US semi-equipment manufacturers, people seem to have neglected ASML. Methinks, this company could be the real "diamond in the rough", as it has a non-cyclical business, and so many tailwinds for the next 2 years.
    17 Aug 2014, 02:40 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs