Applied Materials Trades at Record Levels Lifted by Bullish Outlook for Semiconductor Industry
February 19 2021 - 12:29PM
Dow Jones News
By Maria Armental
Applied Materials Inc. is trading at record levels following
strong performance in the latest quarter, including record
quarterly revenue, and bullish commentary on the semiconductor
industry.
Shares, which traded as high as $124.50 on Friday, recently
traded at $122.06, up nearly 8% for the day and on track for a
record closing.
The chip-making equipment manufacturer has benefited by the
digital acceleration during the coronavirus pandemic, and company
officials said they see ample room for growth, including in
rebounding specialty markets like automotive.
For example, Chief Executive Gary Dickerson said in the
company's earnings call, automotive, "where there are known supply
shortfalls, total semi consumption is expected to expand more than
15% this year translating these factors to industry
investments."
Company officials pointed to chip manufacturing equipment
spending this year topping $70 billion.
"This is going to be a decade-plus investment cycle," Chief
Financial Officer Dan Durn said in the call. "Semiconductors are
going to be on the key path of enabling some pretty major trends
that play out around the world."
"We believe the continued evolution of devices that require new
architectures and structures all play into Applied's 'sweet spot'
where it possesses the broadest coverage of key process areas,"
Stifel analysts Patrick J. Ho, Brian Chin and Nicolas E. Doyle
wrote. "Moreover, the company is benefiting from emerging trends in
the advanced packaging market, where it is positioned in areas,
like etch, deposition, and planarization, where these processes are
increasing in intensity trends."
Stifel's target price on Applied's stock is $140.
Among the analysts that raised price targets were Mizuho
Securities USA LLC, which raised it to $130 from $96 pointing to
Applied's "strong strategic value proposition with share gains,"
and JPMorgan, which raised it to $146 from $88.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
February 19, 2021 12:14 ET (17:14 GMT)
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