Chart of the Day: Is This the Right Spot for Applied Materials?
Semiconductor stocks are trying to get it back into gear, but the equipment names are holding up the rear. Applied Materials ($AMAT) is in that group, along with Lam Research ($LRCX), ASML Holding ($ASML) and KLA Corp. ($KLAC) (the latter reports earnings after the close Wednesday). Applied will report their latest quarter in early November.
Why are these companies struggling to keep up? Some would point to valuation, but we believe the AI opportunity is compelling and names like Applied deserve a premium multiple, as they have proven the growth exists. Interest-rate pressures are a reason too, and perhaps selling on the news of earnings is a culprit.
Whatever the case, Applied’s chart is weak but showing some improvement. There’s a small series of higher lows in the top chart, the candles just went from purple to pink, so it’s cautiously bearish. Money flow is in the cellar, weak and bearish. MACD may be turning up soon while relative strength is pushing upward again. Momentum is at the bottom but is turning up.
The stock is far away from all-time highs but it just takes a few baby steps to get going. If anything, the stock is washed out.
We added more shares of Applied Wednesday, picking some up on the cheap. We like Applied in TheStreet Pro Portfolio and rate it a One, or “buy at anytime.”
More Pro Portfolio:
- Adding to 2 Holdings After Earnings, PMI Updates
- Tracking 49 Signals Across 11 Portfolio Investment Themes
- Weekly Roundup: Renewed AI Concerns Weigh on the Market and Portfolio
At the time of publication, TheStreet Pro Portfolio was long AMAT.
