13 Big Funds Sold Applied Materials. Should You Follow Them Before Earnings?
Yahoo! Finance ·
Key points
- Four funds (XN LP, Palestra Capital Management, Contour Asset Management, Junto Capital Management) sold every share in the quarter, and Maverick Capital and Tairen Capital exited large portions of their positions.
- Abrams Bison Investments cut its stake by 22% but still held 552,000 shares, making up 19.5% of its 13F-eligible stock, indicating AMAT remained a top holding for some funds.
- Several sellers shifted exposure within the chip equipment space, with Anther Capital trimming AMAT 38% but boosting stakes in Lam Research and Teradyne, and Kinetic Partners Management trimming AMAT 47% while increasing its KLA stake.
- Analysts collectively raised fiscal 2027 EPS expectations even as AMAT’s share price fell about 48% from the June 30 level, compressing the forward P/E from 49x to about 21x.
- Lam Research, Teradyne, and KLA provided stronger near-term guidance, underscoring ongoing demand in the sector, while AMAT remained the cheapest among them at around 21x forward earnings.
- The market consensus target for AMAT sits around $621, well above the recent close, suggesting upside despite the stock’s mid-cycle risk; some firms, however, trimmed targets or cautioned about peak-cycle earnings.
- Trading considerations center on whether fourth-quarter revenue misses or a tepid first-quarter guide could erode optimism, potentially prompting further selling into the Nov. 12 earnings release.
Summary
Thirteen large funds reduced Applied Materials’ AMAT holdings by the June 30 quarter, with four selling every share and several trims or reallocations into Lam Research, KLA, or Teradyne. Despite a roughly 48% drop in AMAT since June 30, analysts boosted fiscal 2027 earnings estimates, driving the forward P/E down to about 21x—near its five-year average—making the stock more palatable relative to peers. The broader chip-equipment group rallied with stronger guidance from Lam, Teradyne, and KLA, while AMAT trades as the cheapest of the four, prompting debate on whether to stay into the Nov. 12 earnings report. The author leans toward holding AMAT into the print, citing rising estimates and company positioning, but warns that a weak Q4 guide could unsettle expectations. Outlook hinges on quarterly demand signals and how the stock’s valuation evolves against peers as results unfold.
This summary was written with AI. The full story has every detail.