Applied Materials Is Well-Positioned But 'Investigation' Taints Strong Quarter Outlook, Analysts Say
Portfolio Pulse from Surbhi Jain
Applied Materials Inc (NASDAQ:AMAT) shares fell after Q4 earnings due to a report of a criminal investigation for potentially avoiding export restrictions to China's SMIC. Analysts from Goldman Sachs, Needham, Mizuho Securities, and Stifel reiterated Buy ratings with price targets ranging from $156 to $180, citing a strong quarter and market share outlook. Concerns over the investigation's impact on valuation and potential US sanctions were noted, but the company's long-term position remains strong with expected growth in foundry/logic and NAND.
November 17, 2023 | 7:30 pm
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NEUTRAL IMPACT
Goldman Sachs analyst Toshiya Hari reiterated a Buy rating on AMAT with a 12-month price target of $156, acknowledging a strong quarter offset by the investigation.
Goldman Sachs' reiteration of a Buy rating on AMAT with a positive price target suggests confidence in the company's fundamentals despite the investigation. However, as Goldman Sachs is not the focus of the news, the impact on its stock is likely to be neutral in the short term.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Applied Materials reported strong Q4 earnings but is under investigation for potentially avoiding export restrictions to China's SMIC, causing stock pressure.
The criminal investigation into Applied Materials' potential avoidance of export restrictions is a significant legal issue that could affect investor sentiment and the company's future operations, especially regarding its dealings with China. This negative news is likely to overshadow the positive earnings report in the short term, leading to potential stock price decline.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 100