5 Semiconductor Stocks to Buy Now

4. Applied Materials, Inc. (NASDAQ:AMAT)

Number of Hedge Fund Holders: 74

Applied Materials, Inc. (NASDAQ:AMAT) provides manufacturing equipment and software to the semiconductor industry. The company operates through Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets segments. BofA analyst Vivek Arya on June 29 maintained a Buy rating on Applied Materials, Inc. (NASDAQ:AMAT) but lowered the price target on the stock to $118 from $135. 

On June 9, Applied Materials, Inc. (NASDAQ:AMAT) declared a $0.26 per share quarterly dividend, in line with previous. The dividend is distributable on September 15, to shareholders of the company as of the close of business on August 25. Applied Materials, Inc. (NASDAQ:AMAT) announced on June 16 that it has acquired Picosun Oy, a privately held Finnish semiconductor equipment company. The company stated that Picosun’s ALD technology enhances its product portfolio and customer engagements. Picosun also lends extensive R&D capabilities and strong links with top research institutions and universities worldwide to Applied Materials, Inc. (NASDAQ:AMAT). 

According to Insider Monkey’s Q1 data, 74 hedge funds reported bullish positions in Applied Materials, Inc. (NASDAQ:AMAT), with collective stakes worth $4.39 billion. David Blood and Al Gore’s Generation Investment Management featured as the leading stakeholder of the company, with 4.25 million shares valued at $561 million.

Here is what Davis Opportunity Fund has to say about Applied Materials, Inc. (NASDAQ:AMAT) in its Q4 2021 investor letter:

“Within technology and communication services, we own a number of online businesses and semiconductor related companies, including Alphabet, Amazon, Intel, Applied Materials and Texas Instruments. Within the realm of high technology, we believe that leadership positions reflect enduring and widening competitive advantages over smaller competitors, with few exceptions. This is because online businesses, as well as semiconductor companies, benefit from economies of scale. An online search and advertising engine will, in general, be more profitable per unit of cost as it grows larger in terms of users and advertising dollars. It is a hub-and-spoke model, in other words, where it is generally not necessary to grow expenses at the same rate that revenues grow beyond a certain threshold. Therefore, returns on capital tend to be higher, the larger and more dominant the online search company is.”