Applied Materials: Upgrading To Buy Amid AI And Semiconductor Tailwinds
Summarize this article with:
Star Investments6.73K FollowersFollow5ShareSavePlay(33min)CommentsSummaryApplied Materials faces headwinds from reduced China exposure and cyclical weakness in key segments, tempering recent growth.2026 is expected to favor AMAT’s strengths, with leading-edge foundry/logic, DRAM, and advanced packaging driving anticipated growth.Valuation appears stretched; reverse DCF implies aggressive 23.9% FCF growth needed to justify the current price.Despite improved sentiment and sector tailwinds, WFE demand volatility and high expectations warrant caution on AMAT’s risk/reward profile.However, I am upgrading the stock to a buy due to the company potentially entering a WFE upcycle. Sundry Photography/iStock Editorial via Getty Images I have changed my opinion about Applied Materials (AMAT) since I gave it a hold rating in my article on April 09, 2024. I have upgraded it to buy because the Applied MaterialsThis article was written byStar Investments6.73K FollowersFollowI have been a Merchant Seaman that has traveled the world for over 30 years. Within the last 15 years, I developed a very intense interest in investing. I learned a lot of what I know about investing from The MF. Also because I have a engineering background, I often tend to gravitate to Tech stocksAnalyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.