Applied Materials Stock Brushes Off Bear Notes, Sales Warning

The stock earlier dipped two a nearly two-year low

Digital Content Manager
Oct 13, 2022 at 12:26 PM
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Applied Materials, Inc. (NASDAQ:AMAT) is up 4.6% to trade at $79.52 at last check, despite a warning that the Biden administration's regulations to restrict U.S. companies from supplying Chinese chipmakers with equipment could result in a $250 million to $440 million loss in net sales for the quarter ending on Oct. 30, with similar results expected in the next three months.  

The security is also brushing off seven price-target cuts, including one from Barclays to $70 from $85. Analysts are bullish towards the equity, though, with 13 in coverage rating it a "buy" or better, while five say "hold." Plus, the 12-month consensus target price of $118.33 is a 48.2% premium to current levels.

Options traders are chiming in as well, with 14,000 calls and 16,000 puts across the tape so far, which is double the volume that is typically seen at this point. Most popular is the October 70-strike put, followed by the April 47.50 put, with positions being opened at both. 

The options pits have been bearish of late. This is per the equity's 10-day put/call ratio of 1.22 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 92% of annual readings.

Before swinging into positive territory today, the shares slipped to their lowest level since November 2020. The 20-day moving average has been guiding Applied Materials stock lower since mid-August, with a quick rally above the trendline losing steam earlier this month in just three days. Year-to-date, AMAT is 49.6% lower. 


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