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We recently published a list of Buy The Dip On These 10 Semiconductor Stocks Tumbling On China H20 Chip Sale Ban. In this article, we are going to take a look at where Applied Materials, Inc. (NASDAQ:AMAT) stands against other semiconductor stocks tumbling on China H20 chip sale ban.
Semiconductor manufacturers are at the forefront of the technological battle, especially in the context of China’s rapid tech developments. One would have thought President Trump would take it easy on the chipmakers owing to their critical position in the US and global tech infrastructure.
However, investors are now finding out that semi stocks aren’t immune to tariffs, with the latest round of tariffs expected to cost manufacturers around $1 billion. This cost will be incurred through lost sales, increased regulatory compliance, and elevated supply chain costs.
Uncertainty regarding the exact details of the tariffs continues to cause chaos in the market. Chip stocks are sliding as the leading chipmaker, led by Jensen Huang, finds its H20 chips banned from export to China. As the leading chipmaker tries to steer its way out of the crisis, other companies that rely on this giant for business are also trying to figure out what to do.
We decided to take a look at such stocks and see if they offer value. Remember that the H20 chips were made specifically for China, and a ban on selling them is only a temporary headwind, not something that threatens the company’s moat.
To come up with the list of semiconductor stocks worth buying on the China H20 chip sale ban, we considered stocks that are an integral part of the semiconductor supply chain and ranked them by hedge fund interest in their stocks.
A technician in a clean room assembling a semiconductor chip using a microscope.
Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 80
Applied Materials, Inc. is a manufacturing services, software, and equipment provider to the display, semiconductor, and related industries. It operates in the Display, Applied Global Services, and Semiconductor Systems segments.
At the end of the last month, the company received an upgrade from Jefferies ahead of the upcoming earnings season. Jefferies upgraded AMAT from Hold to Buy with an increased target price of $195 from $185, as a key beneficiary of DRAM and Edge. This upgrade was also based on the March guidance, minimizing China exposure, something that will help the company as the trade war intensifies.
At its previous earnings. AMAT guided for 7% revenue growth for full-year 2025. Expected adjusted EPS growth for the year is 10%, higher than the revenue growth. The company’s sustainable dividend and share buyback programs show its commitment to shareholders. It has also announced a new share buyback program worth $10 billion.