Applied Materials (AMAT) Stock: Downgraded to Neutral as Competition Rises in China

Applied Materials, Inc. (NASDAQ:AMAT) is one of the AI Stocks in the Spotlight for Investors. On September 11, Mizuho analyst Vijay Rakesh downgraded the stock from Outperform to Neutral with a price target of $175.00 (from $200.00).

The firm cited intensifying competition in China and technology transitions that may erode the company’s market share. It noted that AMAT is losing market share in Sputtering/PCVD where it is heavily exposed. Meanwhile, China’s domestic suppliers are gaining share and putting pressure on AMAT’s position.

“AMAT exposed to PVD/Sputtering, Plasma CVD, and 28nm+ Conductor Etch (~60% of Revs for AMAT, but only 40% of Revs for LAM), losing share. We believe the largest share shifts are happening in Sputtering/PCVD where AMAT’s revenue share is ~47% while LRCX less exposed at ~15%. China Domestic OEMs like Naura and AMEC are gaining Share in PVD (Naura gaining ~2-5pts/yr as AMAT loses 2-4pts), legacy 28nm etch nodes (Naura/AMEC gaining ~2ppt from AMAT/LRCX), and Plasma CVD as AMAT is potentially losing share as customers SMIC/YMTC ramp domestic CN WFE suppliers.”

Applied Materials, Inc. (NASDAQ:AMAT) is a leader in materials engineering solutions engaged in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries.

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Disclosure: None.