In a report released today, Ling Lee Keng from DBS maintained a Hold rating on Applied Materials (AMAT – Research Report), with a price target of $194.50.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
Ling Lee Keng has given his Hold rating due to a combination of factors impacting Applied Materials’ performance. While the company has shown strong results with both revenue and earnings per share surpassing expectations, there are concerns about the significant contribution of the Chinese market to its revenue. China’s share of Applied Materials’ revenue, which stood at about 30% in the fourth quarter of 2024, poses a potential risk in light of increasing geopolitical tensions and trade restrictions between the U.S. and China.
Despite these challenges, Applied Materials is well-positioned for long-term growth, driven by its leadership in key areas such as AI, high-performance DRAM, and advanced packaging. The ongoing de-globalization of the semiconductor industry, supported by legislative measures like the U.S. CHIPS Act, is expected to benefit the company by increasing demand for its equipment. However, the potential expansion of restrictions on chip-making equipment exports to China from advanced nodes to trailing nodes remains a concern, justifying the Hold rating despite the positive long-term outlook.
According to TipRanks, Lee Keng is a 3-star analyst with an average return of 4.8% and a 40.96% success rate. Lee Keng covers the Technology sector, focusing on stocks such as Applied Materials, Tokyo Electron, and Lam Research.