Shares of Lam Research Corp. and Applied Materials Inc. are down in premarket trading, though Stifel analyst Patrick Ho reiterated his long-term optimism about the names following recent reports of memory shipment push-outs. “We believe these are attributable to Samsung, and primarily on the 3D NAND front,” Ho wrote. “We remind investors that Samsung has been Lam’s largest customer for many years now (going back to the early 2000s when the company began working aggressively with Samsung).” Ho remains upbeat in his long-term view of Lam, which he rates a buy, and the industry in general. “We believe that while our 2018 WFE [waber fab equipment] forecast has been lowered, we are still tracking toward a record year (now up +5-6% versus up +10%) and our 2019 WFE forecast has actually been increased due to the timing of the push outs returning the following year,” he wrote. Ho is also bullish on Applied Materials, which he said has a more balanced customer base than Lam and less exposure to the memory business. “This recent weakness presents a very attractive buying opportunity for our top large cap stock selection,” he wrote. Lam shares are up 20% over the past 12 months, while Applied Materials shares have gained 14%. The S&P 500 has risen 14% in that time, and the PHLX Semiconductor Index has climbed 33%.
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