Stock Analysis | Applied Materials Outlook - Weak Technicals and Mixed Analyst Views Amid Industry Developments

Market Snapshot

Headline takeaway: Applied Materials (AMAT.O) is facing weak technical signals and a mixed analyst outlook, with a recent price drop of -5.45%.

News Highlights

Recent news suggests a dynamic and competitive landscape in the semiconductor and semiconductor equipment industry:

• On July 31, an industry comparison highlighted NVIDIA's position against competitors in the semiconductor sector, indicating a focus on performance-driven players in a cutthroat market.
• Also on July 31, Infineon Technologies, NXP, and STMicroelectronics were reported to be facing rising competition in the $132 billion automotive semiconductor market, a sector that could influence Applied Materials' performance.
• On July 30, a report on NVIDIA's industry standing emphasized the importance of thorough company evaluations in a rapidly evolving business landscape, a context that could shape investor expectations for AMAT.O as well.

Analyst Views & Fundamentals

Average Rating Score: 4.00 (simple mean)

Weighted Rating Score: 2.10 (performance-weighted)

Rating Consistency: Analysts are divided in their views, with ratings ranging from "Strong Buy" to "Buy" and "Neutral." This dispersion indicates uncertainty in the market's expectations for AMAT.O.

Price Trend Alignment: The current price trend is negative (-5.45%), and it appears to align with the weighted analyst expectations, which are relatively neutral.

Key Fundamental Factor Values and Internal Diagnostic Scores (0-10):

• Net cash flow from operating activities per share (YoY growth rate %): 27.55% (internal diagnostic score: 1)
• Net profit attributable to parent company shareholders / Net profit (%): 100.00% (internal diagnostic score: 1)
• Accounts receivable turnover ratio: 2.50 (internal diagnostic score: 2)
• Gross profit margin (GPM): 49.08% (internal diagnostic score: 2)
• Total profit (YoY growth rate %): 3.35% (internal diagnostic score: 0)
• Cash-UP: 0.61 (internal diagnostic score: 3)
• Gross profit on assets (GPOA): 10.36% (internal diagnostic score: 2)
• Interest coverage ratio (EBIT / Interest expense %): 34.64% (internal diagnostic score: 2)
• Net profit attributable to parent company shareholders (YoY growth rate %): -11.20% (internal diagnostic score: 3)
• Cash-MV: -0.47 (internal diagnostic score: 0)

Money-Flow Trends

Money-flow analysis for AMAT.O shows a positive overall trend, indicating that big-money players are showing interest in the stock. The inflow ratios for all categories (Small, Medium, Large, Extra-large) are slightly above 0.5, suggesting that both institutional and retail investors are buying more than selling.

Big-money vs. retail flows: The block inflow ratio is at 0.5091, indicating that large institutional investors are slightly more active in buying than selling. This is a positive sign as it suggests confidence from major market participants.

Key Technical Signals

Technical analysis for AMAT.O shows a weak trend with more bearish indicators than bullish ones. The technical score is 2.83, which is low and suggests caution for investors.

Internal Diagnostic Scores for Technical Indicators:

• Williams %R Oversold: 3.57 (internal diagnostic score: 3.57)
• Bearish Engulfing: 2.10 (internal diagnostic score: 2.10)

Recent Chart Patterns: Over the past five days, the Williams %R Oversold pattern has appeared multiple times, and a Bearish Engulfing pattern was noted on July 29. These signals indicate that the market is in a weak state and that there are significant risks of further declines.

Key Technical Insights:

• Technical indicators show the market is in a weak state, with a need to monitor for falling risks.
• Bearish signals are clearly dominant (2 bearish vs 0 bullish).
• Recent technical signals are sparse, and the market is relatively quiet.

Conclusion

Given the weak technical signals and the mixed analyst views, investors may want to consider waiting for a pull-back before entering a position in Applied Materials. The recent price drop of -5.45% and the bearish technical indicators suggest that the stock is currently in a vulnerable position. While the fundamentals show some positive aspects, the overall technical picture is not encouraging. Investors should keep an eye on the market for any significant developments that may influence the stock's performance in the near future.