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Technology Stocks : Semi Equipment Analysis
SOXX 312.76+1.1%Dec 8 4:00 PM EST
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From: Sam2/15/2019 12:49:03 PM
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Applied Materials Stock Is Sinking Because Its Sales Forecast Was Below Expectations -- Barrons.com
DOW JONES & COMPANY, INC. 12:47 PM ET 2/15/2019

Symbol Last Price Change
AMAT 39.41 -1.3 (-3.19%)
QUOTES AS OF 12:47:57 PM ET 02/15/2019


Applied Materials (AMAT) stock is falling after the company gave a worse-than-expected forecast for the current quarter.

On Thursday, the chip equipment maker reported revenue slightly ahead of Wall Street expectations, but gave a sales forecast range about 5% below the consensus for the April quarter.

Susquehanna Financial Group analyst Mehdi Hosseini reiterated his Neutral rating for Applied Materials(AMAT) shares, citing deteriorating memory chip pricing. Applied Materials(AMAT) manufactures the equipment used to make chips.

"We envision greater than consensus margin pressure for DRAM manufacturers," he wrote on Friday. "Such margin trends, in our view, will manifest into another round of cuts to equipment vendors and shipments."

DRAM refers to dynamic random-access memory, used in desktop computers and servers.

Read: Nvidia Probably Can't Meet Its Sales Target, Analysts Say

Applied Materials (AMAT) stock was down 3.1% to $39.44 on Friday. The analyst lowered his price target to $34 from $35.

Hosseini said memory chip pricing is down 35% year over year so far this year, while chip manufacturing costs are down less than 5%.

"We remain on the sidelines until expectations fully discount the downside risk," he wrote.

Write to Tae Kim at tae.kim@barrons.com
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