Lam Research Corp

Applied Materials (NASDAQ:AMAT) stock gained around 5% in after-hours trading on Thursday following its second-quarter results.

Applied Materials (AMAT) stock rose 4% after market hours yesterday after the company posted strong fiscal 2019 fourth-quarter results.

Today, Western Digital stock (WDC) slumped as much as 16.25% after CEO Steve Milligan announced his sudden retirement. Is the worst over for WDC?

Last week, five major semiconductor companies reported their third-quarter earnings results. Three of these five reported upbeat earnings.

Tech stocks eBay (EBAY), PayPal (PYPL), and Lam Research (LRCX) are moving in after-hours trading after today’s earnings reports.

This week, semiconductor equipment suppliers Teradyne Inc. (TER) and Lam Research (LRCX) will report their quarterly earnings.

Major chip companies Texas Instruments (TXN) and Xilinx (XLNX) released their earnings last week and saw their stocks fall.

Today, the world’s largest foundry, Taiwan Manufacturing Semiconductor Company or TSMC, released its third-quarter earnings, rallying chip stocks.

Semiconductor firms Lam Research and KLA Corp. have crushed the markets in 2019. While Lam Research is up 65.4%, KLA has returned 71% year-to-date.

Micron Technology (MU) reported positive FCF (free cash flow), a strong balance sheet, and double-digit ROI (return on investment) in fiscal 2019.

Micron (MU) stock dipped 11% after its Q4 of fiscal 2019 earnings. This slump occurred after the stock rallied about 20% in September on analysts’ optimism.

Micron shares fell more than 9% in early market trading today. The stock is trading at $44.09, which is 14% below its 52-week high.

Micron Technology reported upbeat fourth-quarter fiscal 2019 results on September 26 after the market closed. Micron stock fell 1.76% to $48.60 on the day.

Micron Technology (MU) stock is in the spotlight this week, as the company is set to release its fiscal 2019 fourth-quarter results on Thursday after markets close.

Applied Materials (AMAT) shares have fallen more than 4% on Friday. The company announced its third-quarter results after the market closed on Thursday.

So far, semiconductor earnings have raised investors’ expectations about growth in the second half and next year.

The US markets are up today as Wall Street braces for a busy earnings week. The S&P 500 ETF is up 0.3%, and semiconductor stocks lead the market’s gains.

On June 25, Micron Technology (MU) reported better-than-expected earnings results for the third quarter of fiscal 2019, which sent the stock up 13.3% a day after its earnings release.

On April 24, Xilinx (XLNX) and Lam Research (LRCX) announced their fiscal earnings for the quarter.

On April 24, several semiconductor stocks made new 52-week highs.

The semiconductor industry is going through a downturn, but many companies expect growth to resume in the second half of 2019.

Most semiconductor stocks with exposure to the memory market are falling on the back of continued weakness.

Micron Technology (MU) and Western Digital (WDC) stocks were among the top five gainers of the S&P 500 Index on March 21 in the first half of the trading session.

Most semiconductors stocks had risen more than 2% as of midday today, with several factors having raised investors’ optimism about the sector’s growth.

Lam Research (LRCX) was recently downgraded to “equal-weight” from “overweight” by Morgan Stanley, according to a note to clients cited by Bloomberg.

On February 14, in after-hours trading, Applied Materials stock fell 2% as its fiscal 2019 second-quarter guidance missed estimates.

In fiscal 2018, AMAT’s revenue rose 19% YoY to $17.25 billion, while its non-GAAP (generally accepted accounting principle) net income rose 29.6% YoY to $4.57 billion.

Analysts expect AMAT’s full-year 2019 revenue to fall 11.5% YoY to $15.27 billion due to weak demand from memory chipmakers and China.

In this series, we’ll see what investors should expect from Applied Materials’ upcoming earnings.

The semiconductor market is seeing demand weakness, especially in China. SME (semiconductor manufacturing equipment) suppliers are also seeing demand weakness.

Semiconductor stocks’ reaction to earnings After bottoming out in December, the stock market has been showing signs of recovery. Semiconductor stocks have been recovering this month due to anticipation that the second half of 2019 will bring growth. However, this week has been very volatile for semiconductor stocks—most companies reported weak earnings and guidance, with just a […]

The fourth-quarter semiconductor earnings season began with warnings of a demand slowdown.

WDC’s price target was reduced to $75.00 from $100.00, and the stock is trading at $55.76.

Samsung (SSNLF) is contemplating lowering its memory chip production next year as a measure to manage supply and prices.

Qualcomm (QCOM) held its annual shareholder meeting in March.

Macro events are always overblown I wrote last week that I did not think Trump’s legal woes would affect the market (SPY) much.  I also said two weeks ago that Turkey wouldn’t either.  Macro worries are almost always overblown.  So far, so good.  Yes, volume is low, but  market participation is broad and stocks are […]

Applied Materials, the world’s largest chip manufacturing equipment vendor, reported strong fiscal Q3 2018 earnings but lowered its fiscal Q4 2018 guidance.

NVIDIA and Applied Materials published their latest earnings results on August 16. Their weaker guidances have spooked investors.

In the fiscal second quarter, AMAT’s Semiconductor Systems division’s revenues peaked at $3.0 billion, accounting for 65.6% of the company’s revenues.

In the March quarter, AMAT had an operating expense ratio of 16.6%, which was the lowest operating expense ratio AMAT has ever achieved.

Perrigo, which is an American international manufacturer of private label over-the-counter pharmaceuticals, was the S&P 500’s top gainer on July 17.

Both domestic and foreign semiconductor companies have increased their capital spending on fabrication facilities in China (FXI).

Micron Technology (MU) delivered record fiscal Q3 2018 earnings and guidance on June 20, beating analysts’ estimates by a good margin.

David Tepper’s Appaloosa Management’s top buys in the first quarter were Micron Technology (MU), Lam Research (LRCX), Wells Fargo (WFC), UBS (UBS), and Allergan (AGN).

Applied Materials (AMAT), KLA-Tencor (KLAC), and Lam Research (LRCX) are witnessing strong growth in the memory and logic segments.

In fiscal 1Q18, AMAT’s Semiconductor Systems division’s revenue rose 32.6% YoY (year-over-year) to $2.9 billion.

Applied Materials (AMAT) supplies SME (semiconductor manufacturing equipment) to chip makers all over the world.

AMAT increased its stock buyback authorization by $6.0 billion, doubled its dividend per share, and is working to improve its profits to improve its ROE.

On May 9, AMAT had a forward PE ratio of 12.0x, which is lower than KLAC’s ratio of 13.7x but higher than LRCX’s ratio of ~11.4x.

Because Applied Materials (AMAT) is positioned at the beginning of the supply chain, its stock is among the first to be impacted by any industry-wide news.

During its fiscal 1Q18 earnings call, Applied Materials’ CFO, Daniel Durn, stated that the broadening of the semiconductor market would increase WFE spending and reduce its cyclicality.

Applied Materials (AMAT) earned 21% of its 2016 revenues and 19% of its 2017 revenues from China. Any major shift in this market could hurt AMAT.

Trade war jitters between the US and China sent Applied Materials stock to $55.40 on March 23 from its 52-week high of $62.40 on March 12.

Lam Research (LRCX) expects its shipments to fall $100 million sequentially to $3 billion in the June quarter.

Lam Research (LRCX) was among the first semiconductor companies to release its fiscal 3Q18 earnings for the quarter that ended on March 25.

The semiconductor earnings season started on a negative note with companies at the start of the supply chain reporting weaker guidance.

The earnings season started with better-than-expected earnings for semiconductor equipment manufacturer Lam Research (LRCX).

Taiwan Semi is warning you Taiwan Semiconductor (TSM) missed and warned today.  They lowered 2Q revenue guidance to $7.8-$7.9 billion.  The street was at $8.82 billion.  They blamed it on smart phone slowing.  Mizuho securities also warned today that Apple’s (AAPL) forward guide would have to come down as well. Yesterday, Lam Research’s (LRCX) stock […]

Premium Content As we make it to the middle of the first week of earnings, some interesting trends are developing, some a bit alarming, some decent.  The overall market still looks solid with the S&P500 (SPY) now up over 6% since the lows on April 2.  The Dow Jones Industrial Average (DIA) held the 200 […]

Lam Research’s (LRCX) revenue rose 12% and 36% in 2016 and 2017, respectively. It rose 52% in 1Q18.

The complexity of AI chips could lead to manufacturing innovation since these chips require larger dimensions and specialized processors.

In calendar 3Q17, Qualcomm (QCOM) was the richest semiconductor company in terms of cash, with net cash of $17.9 billion.

Generally, growth stocks are the ones that deliver above-average capital appreciation, but such stocks may or may not give dividends.

The semiconductor industry is currently undergoing a major transition toward AI (artificial intelligence), which is opening up new opportunities.

Lam Research’s revenue and earnings in 2015 and 2016 Lam Research’s (LRCX) revenue rose 14% and 12% in 2015 and 2016, respectively. Revenue from Taiwan, China, and Southeast Asia drove growth in both years. Revenue from Korea, the United States, and Europe rose in 2015 before falling in 2016, and Japan’s revenue fell in 2015 before rising […]

In calendar 2Q17, TSMC (TSM) was the richest semiconductor company in terms of cash, with net cash of $18.5 billion.

As of September 12, 2017, Nvidia (NVDA) was the fastest-growing stock, rising 185% over the past year, compared to the industry’s 32% growth.

Intel (INTC) is the world’s largest semiconductor company and also the least volatile semiconductor stock, though it has a beta of 1.23.

According to SEMI’s estimates, the global semiconductor market is expected to grow at a CAGR (compound annual growth rate) of 6.7% between 2015 and 2025.

On August 7, 2017, AMAT had a PS ratio of ~3.7x.

Applied Materials (AMAT) is witnessing strong growth momentum, with revenues growing in double digits and earnings per share growing in triple digits.

The emergence of the IoT (Internet of Things), self-driving cars, AR/VR (augmented/virtual reality), and AI (artificial intelligence) is driving demand for logic and memory chips.

Applied Materials (AMAT) witnessed strong 45% year-over-year growth in 1Q17 while the overall SME market witnessed growth of 110% YoY.

Applied Materials’ revenues rose 45% year-over-year to $3.5 billion in fiscal 2Q17, as its foundry and display equipment sales rose in triple digits.

Applied Materials (AMAT) stock has risen 86% over the past 12 months to the 17-year high of $44. In this series, we’ll look at the factors driving Applied Materials’ fiscal 2017 earnings.

In 2016, AMAT stock rose 92.2%, outperforming the stocks of LRCX and KLAC, which rose 50% and 20.6%, respectively.

AMAT’s FCF (free cash flow) increased significantly in fiscal 2Q16 when the company started reporting revenue growth after several quarters of decline.

Another segment driving the Semiconductor Systems’ growth is the memory business.

ASML is seeing strong demand for its EUV technology and the strong demand was reflected in its latest fiscal 4Q16 earnings.

Applied Materials (AMAT) is currently at the peak of its cycle where it is reporting strong growth from almost all segments.

For fiscal 1Q17, AMAT expects its non-GAAP (generally accepted accounting principles) gross margin to rise 43.8% from 43.7% in fiscal 4Q16.

The S&P 500 Telecom Services sector rose 1.1% on December 19. Globalstar (GSAT) and Iridium (IRDM) were the top performers in the telecom sector.

The company aims to increase its EPS (earnings per share) from an estimated $1.75 in fiscal 2016 to $2.8 in fiscal 2019, growing at a CAGR (compounded annual growth rate) of 17%.

In fiscal 2Q16, Applied Materials’ (AMAT) revenue was almost flat at $2.45 billion, beating the analyst estimates of $2.43 billion.

Applied Materials’ earnings will likely increase in 2016 as the overall semiconductor industry transitions to new technology.

On July 28, 2016, Oracle (ORCL) and NetSuite (N) announced a merger. Oracle will purchase NetSuite for $109 per share, or $8.6 billion net of cash and debt.

NetSuite agreed to a non-solicitation agreement with a fiduciary out. This means that during the pendency of the merger, NetSuite may not contact other potential buyers.

With most mergers, the rate of return is driven by the time it takes to finalize the transaction. For Oracle (ORCL) and NetSuite (N), the timeline will be driven by the antitrust waiting period.

Oracle (ORCL) co-founder Larry Ellison and his family control 45% of NetSuite (N) stock. So it’s theoretically possible but not likely that a company could make a hostile bid.

In the merger deal between Oracle (ORCL) and NetSuite (N), the MAE clause lays out the circumstances under which Oracle can back out of the transaction.

The relationship between Oracle and NetSuite goes back a long way. Oracle co-founder Larry Ellison and his family own almost half of NetSuite stock.

Arbitrageurs will certainly be interested in setting up the ARM Holdings (ARMH) spread, especially if they can get an 8% return using the ordinary shares.

ARM Holdings (ARMH) was trading at about $47 per share before the deal with Softbank was announced. The risk-reward ratio is about 12:1.

Softbank is paying a pretty penny for ARM Holdings (ARMH). The premium to the prevailing share price was in the low 40%.

Softbank decided to waive any antitrust or regulatory conditions to the transaction. It doesn’t care if the regulators have issues—it’s buying the company.

ARM Holdings and Softbank are merging in a cash transaction. In an unusual step, there aren’t regulatory or antitrust conditions to the transaction.

The Softbank-ARMS Holdings merger intends to increase Softbank’s growth so that it can position itself as a leader in Internet of Things.

On July 18, Japan’s Softbank and the United Kingdom’s ARM Holdings (ARMH) announced a merger where Softbank will buy ARM for 1,700 pence in cash.

The chance of regulators blocking the transaction is pretty low given that LinkedIn (LNKD) and Microsoft (MSFT) don’t compete directly.