As the market finally gets over the fact that personal computer (PC) growth has slowed and they begin to factor in the long-term ramifications, there is also a very bright side to the equation. NAND flash growth should continue to be outstanding, and other areas also are picking up steam. For the top semiconductor capital equipment companies, this could be just the recipe to ignite growth in the second half of 2016.
In a new research report, Stifel analysts make the case that NAND flash memory, which is a type of non-volatile storage technology that does not require power to retain data, could see significant growth, as high as 20%. They also think foundry spending could deliver to the upside. We screened the report looking for some of the firm’s top stocks rated Buy, and found four that look very solid. Two are large caps, and two are smaller cap plays.
This semiconductor capital equipment leader has lagged the overall tech market over the past year, but its shares have bounced smartly off lows printed in February and back in December. Applied Materials Inc. (NASDAQ: AMAT) is actually now finally trading above all the moving averages, and for patient investors may be a high-quality pick now.
The company is the global leader in precision materials engineering solutions for the semiconductor, flat panel display and solar photovoltaic industries. Applied Material’s technologies help make innovations like smartphones, flat screen TVs and solar panels more affordable and accessible to consumers and businesses around the world.
The company posted solid results last week that beat expectations and it raised guidance going forward. Merrill Lynch noted that the company’s core business improved from improving semiconductor capital equipment spending. The firm also cited an increase in organic light-emitting diode (OLED) adoption by companies like Apple as a positive.
Many on Wall Street think that films companies like Applied Materials will benefit from the new Intel and Micron Technology 3D XPoint (which is pronounced 3D cross-point) technology, which is an entirely new class of nonvolatile memory that can help turn immense amounts of data into valuable information in real time.
Applied Materials investors are paid a 1.77% dividend. The Stifel price target for the stock is $24. The Thomson/First Call consensus price target is listed at $25.28. The stock closed Monday at $22.90 per share.