In a hot technology market it’s always good to follow the numbers, and Micron Technology Inc. (NASDAQ: MU) delivered big results this week that came in above Wall Street estimates. In addition, forward guidance for the next quarter was also above analyst expectations. In even more good news, the company’s capital expenditure guidance for fiscal 2018 was very positive. While Micron investors are probably thrilled, they aren’t the only ones who could benefit from the strong showing.
A new RBC research report breaks out the positives from the Micron report for six companies that are in the firm’s research coverage that look to benefit from Micron’s bullish earnings and commentary. All are industry leaders, and they make good sense for aggressive growth accounts.
Some on Wall Street feel this semiconductor capital equipment leader has the broadest range of exposure to 3D NAND and foundry display. Applied Materials Inc. (NASDAQ: AMAT) 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.
This is one of the semiconductor capital equipment stocks that could benefit the most from the capital expenditure plans at Micron. The RBC team said this in the report:
Micron also stated that industry NAND supply will be up high 30% in CY17 and approaching ~50% in calendar 2018 as well with underlying demand drivers remaining solid. Continued supply growth and technology transitions should bode well for semi cap companies.
Applied Materials shareholders are paid a small 0.85% dividend. The stock is rated Outperform at RBC and the price target is $55. The Wall Street consensus target price is $55.50, and the shares traded early on Friday at $51.25.
This is another top chip equipment company that looks to benefit. ASML Holding N.V. (NASDAQ: ASML) engages in designing, manufacturing, marketing and servicing semiconductor processing equipment used in the fabrication of integrated circuits worldwide. It provides the PAS 5500 family products that comprise wafer steppers and step-and-scan systems suitable for the i-line, krypton fluoride and argon fluoride processing of wafers.
This is a lithography intensive company that the analysts see as possibly getting a direct benefit from boost in spending.
The RBC analysts rate the stock Sector Perform, and they have a $155 price objective. The consensus target price is much lower at $142.85. The stock traded on Friday at $170.00 a share.
This stock may be off-the-radar for some, but it also could be a beneficiary from the positive news on Micron. Ichor Holdings Ltd. (NASDAQ: ICHR) is engaged in the design, engineering and manufacturing of critical fluid delivery subsystems for semiconductor capital equipment. The company’s primary offerings include gas and chemical delivery subsystems, collectively known as fluid delivery subsystems, which are key elements of the process tools used in the manufacturing of semiconductor devices.