2 Stocks Behind Today's Semiconductor Sell-Off

NVDA stock was still upgraded at Oppenheimer, though

Aug 17, 2018 at 9:59 AM
facebook twitter linkedin


Applied Materials, Inc. (NASDAQ:AMAT) last night reported fiscal third quarter adjusted earnings of $1.20 per share on $4.47 billion in revenue  -- more than analysts were expecting. However, the graphics chipmaker offered up weak current-quarter forecast, sending AMAT shares down 9.4% to trade at $42.99.

Analysts have been quick to weigh in on AMAT earnings, too. While KeyBanc and Stifel cut their respective price targets to $71 and $70, Craig-Hallum said the Street's reaction to the company's guidance could create an attractive buying opportunity. D.A. Davidson, meanwhile, forecast a "nice recovery" next year.

Most analysts are already bullish on Applied Materials, even with the stock's 15.9% year-to-date deficit. Plus, the shares were recently rejected by their descending 80-day moving average, and are currently trading near their 52-week low of $42.93 from last August. What this means is that AMAT is at risk of more bearish brokerage notes, which could exacerbate today's slide.

The shares of Nvidia Corporation (NASDAQ:NVDA) are also trading lower after earnings, down 2.5% at $250.97. Like its sector peer, Nvidia's second-quarter adjusted earnings of $1.94 and revenue of $3.12 billion came in above estimates. However, the company lowered its third-quarter revenue guidance, citing lessened demand for cryptocurrency chips.

Nevertheless, Oppenheimer upgraded NVDA stock to "outperform" from "perform," while Stifel raised its price target to $250 from $243. Additionally, Jefferies said it is "buyers in front of NVDA's next gen GPU platform, 'Turing,' which launches in Q3." Elsewhere, Cowen lowered its Nvidia price target to $320 from $325, though this still represents expected upside of 27% to current trading levels.

The bulk of those covering Nvidia stock were upbeat heading into today's trading session, which isn't too surprising given the security's longer-term strength. Year-over-year, NVDA is up around 56%. What's more, the equity's recent pullback from its June 14 record high of $269.20 was quickly contained by familiar support at its 120-day moving average.

 

Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!