Don't tell me semiconductor equipment is boring.
A couple of semiconductor equipment companies report earnings soon, and understanding the Wall Street research on those companies could unlock value for an investor.
Lam Research (LRCX) - Get Report and Applied Materials (AMAT) - Get Report report earnings in the very near future, but semiconductor analysts at Stifel may be privy to some important information on the capital equipment manufacturers.
"If NAND [memory chips] bottom [pricing bottom] is here, [Stifel sees] increasing confidence that 2020 will see increase in NAND equipment spending," the Stfel analysts wrote.
Recently, the memory chip market has been in a downswing, as oversupply of the chips has rocked pricing power for the memory makers like Micron (MU) - Get Report . But Stifel thinks "a memory recovery will occur that will spur a pickup in equipment spending in 2020." The analysts added, "Based on some recent checks we have compiled, we believe memory sentiment may be somewhat better than bears are extolling, with NAND likely at a bottom and inventory and demand trends improving over the next few quarters."
Which companies get their revenue from that equipment spending? Lam Research and Applied Materials.
Lam Research reports earnings on July 31, and "Given Lam's high exposure to the memory market, we believe its comments will be reflective of other equipment companies with high memory exposure," Stifel said.
If you're a memory pricing bear, at least listen to Stifel on that one. Listen to Lam's call for indications on how solid its peers' earnings reports will be. Applied Materials reports August 15.
One of the biggest risks to these names even if second half 2019 revenue upside looks promising? Lam Research is up abut 55% year-to-date already to $217 a share. Applied Materials is also up about 55% in 2019 to $52.31.