Deutsche Bank transferred coverage of Applied Materials with a Hold rating and $225 price target. Key mega trends in technology, like artificial intelligence, fab-reshoring and growing semiconductor content per application, have put a spotlight on the chip industry in recent years, the analyst tells investors in a research note. The firm says the combination of “trough estimates and promising long-term drivers” has yielded semiconductor capital equipment valuations at the “very high end of their historical trading ranges and investor comfort levels.” It agrees these names deserve a degree of re-rating higher, but believes “these lofty valuations warrant increased investor caution ahead of likely upward estimate revisions.”
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