Michael Simpson, CFA Applied Materials AMAT-Q WEAK BUY Mar 28, 2018

They just reported and shares jumped. AMAT is the largest semi-equipment-maker. Demand from China was very strong and the company expects that to continue. He owns a lot of semis shares and is bullish this sector.

Washington isn't pleased that they do so much business in China, which is a shame. This is a good company.

His pick. Let's see if demand broadens out.

Just reported, but shares dipped 2%. Reported guidance in-line. Maybe the market is worried over their sales in China, but nothing has changed overnight. It's case of shares being up nicely and are guiding conservatively. This is up 28% this year, so he's fine with it. Has $2 billion free cash flow last quarter reported and carries no net debt.

Still a decent runway ahead. 12-month price target of $258. Has built a moat around the wafer and fabrication side, over 50% market share. Buy it here around $198, another 1/3 in low $180s, and final 1/3 in low $170s.

Potential topping pattern. Could be the top of the recent strength. Would not recommend buying at this time. Wait for trend to reverse upwards. 

It reports Thursday. Watch for the decline on revenues from China YOY. When LAM Research reported, AMAT rose. Options imply a 6% move.

Watch for the decline on revenues from China YOY, but the worse has been priced in already.

It ranks #3 in its sector. They have a lot of exposure to China, which worries many.

Is breaking out and their runway is long, given the AI boom.