Lynx Equity Strategies Sees Buying Opportunity in Applied Materials (AMAT)

Lynx Equity Strategies analyst Jahanara Nissar sees the guidance miss as a buying opportunity for Applied Materials (NASDAQ: AMAT).

"We would look to taking a long position despite the guidance miss as the stock likely trades modestly down in the near term," Nissar commented.

The analyst said bears may be a little disappointed as the ~$450+M revenue miss in Oct guidance did not come from the usual suspect – NAND capex. Instead, management ascribed the FQ4 revenue miss as due to cutback in foundry spending.

Nissar said the Street may have glossed over the rather significant capex cut TSMC announced in July, after AMAT’s previous earnings call.

"... we consider AMAT fundamentals relatively unchanged as TSMC we think is holding back further 12nm/14nm investment while prioritizing 7nm/7+nm/5nm spending into next year," she added.

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