Goldman Sachs Upgrades Semis, Is 'More Positive' On Memory Stocks

The semiconductor stock group got a boost Monday when Goldman Sachs updated its coverage on some popular names.

The Analysts

Goldman analyst Mark Delaney upgraded Micron Technology, Inc. MU from Neutral to Buy and raised his price target from $40 to $56. Delaney reiterated his Neutral rating for Western Digital Corp WDC but raised his price target from $46 to $54.

Goldman analyst Toshiya Hari upgraded Applied Materials, Inc. AMAT and Lam Research Corporation LRCX from Neutral to buy and raised his price targets from $48 and $197 to $56 and $231, respectively. Hari also upgraded KLA Corp KLAC from Sell to Neutral and raised his price target from $104 to $130.

The Thesis

Delaney said Micron will be a big winner from a positive shift in the memory market.

“We are now more positive on global memory stocks as we believe that the excess inventory memory companies are carrying will be depleted faster than our previous expectations, primarily in NAND flash as a result of the Toshiba Memory Corporation (TMC) fab outage that has disrupted a mid single digit percent of annual industry production (and to a lesser extent incremental capex/utilization cuts),” Delaney wrote in the note.

Delaney said industry insiders suggest NAND pricing could start to improve in the third quarter.

Hari said the semiconductor capital equipment group will also benefit from the same tailwinds and chose Applied Materials as his top stock pick. Hari is now calling for wafer fab equipment (WFEC) spending to increase by 7% in 2020, up from his previous forecast of flat growth.

“We expect AMAT to benefit from the improved outlook given its leading WFE share position (18.5%) and exposure to memory (~40% of CY18 revenue) as well as the company’s increased willingness to deploy capital,” Hari wrote.

Price Action

Here’s a look at how the stocks mentioned were trading on Monday morning:

  • KLA was up 1.9%.
  • Lam Research was up 3.5%.
  • Applied Materials was up 4.3%.
  • Western Digital was up 3.6%.
  • Micron was up 2.4%.

Related Links:

Apple, Skyworks Get Big Upgrades Ahead Of Potential 5G iPhone Cycle

Boutique Research Firm Upgrades Nvidia, Says AI, Ray Tracing Will Drive Demand For Chipmaker

Posted In: Goldman SachsMark DelaneyToshiya HariAnalyst ColorLong IdeasUpgradesPrice TargetTop StoriesAnalyst RatingsTrading Ideas

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.