Full Steam Ahead for Applied Materials
Chip-equipment bellwether's quarterly results evidence of sector's strength.
Worries that the current chip cycle is reaching the beginning of the end are clearly overdone, if Applied Materials’ (AMAT) Wednesday evening earnings release was any indication of the health of chip-equipment industry.
For many equipment makers, the reassuring quarter from Applied Materials was very timely. Fears that the current semiconductor cycle is already beginning to peak sparked a recent selloff in the shares of several chip-equipment giants, including Novellus (NVLS), KLA-Tencor (KLAC), and Applied Materials. But with reasonable evidence that industry fundamentals are still strong, and a pullback in the valuations of most chip-equipment stocks, long-term aggressive investors should be taking a good long look at such industry leaders.
Jeremy Lopez does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.