Chip Stocks Rise Amid Reports Of Eased U.S. Sanctions, Despite Bernstein's Downgrades: Retail Sentiment Split

Semiconductor stocks Applied Materials ($AMAT), Lam Research ($LRCX), KLA Corp. ($KLAC), and ASML Holding N.V. ($ASML), traded as markets opened on Friday following reports that the Biden administration is considering softer restrictions on semiconductor equipment and AI memory chip sales to China. 

According to Bloomberg, potential controls may sanction dozens of Chinese firms producing semiconductor equipment and restrict chip manufacturing plants, including two owned by Semiconductor Manufacturing International Corp., a Huawei partner. 

While the U.S. had initially considered sanctioning six suppliers to Huawei Technologies — the telecom giant central to China’s tech industry — it now plans to add only some of these suppliers to the entity list. Notably, ChangXin Memory Technologies, which is working on AI memory chip technology, will be excluded from the sanctions.

The Wired reported the measures could be announced as early as Monday.

Bernstein has revised its 2025 wafer fab equipment (WFE) spending forecast down to $107 billion from $115 billion, and lowered its 2026 estimate to $116 billion from $122 billion. It anticipates reduced spending in China due to potential U.S. restrictions, as well as weaker projections for NAND and logic markets. 

The brokerage has updated its financial models, leading to lowered price targets for semiconductor equipment makers.

Applied Materials ($AMAT)

Applied Materials Sentiment and Message Volume on Nov 29 as of 9:00 a.m. ET | Source: Stocktwits

Shares of Applied Materials were up more than 2% at market open on Friday despite Bernstein lowering its price target on the stock to $210 from $220 while maintaining an ‘Outperform’ rating. 

On Stocktwits, retail sentiment around the stock remained ‘neutral’ (51/100) with no significant change in chatter. 

Shares of Applied Materials have gained 13% this year so far. 

Lam Research ($LRCX)

Lam Research Sentiment and Message Volume on Nov 29 as of 9:05 a.m. ET | Source: Stocktwits

Shares of Lam Research jump nearly 4% at market open on Friday. However, retail sentiment around the stock was in the ‘bearish’ (38/100) territory, down from ‘bullish’ a day ago. 

Bernstein also lowered its price target on Lam Research to $85 from $95, maintaining a 'Market Perform' rating on the shares.

Lam Research stock has devalued by 2% so far this year. 

ASML Holding N.V. ($ASML)

ASML Holding N.V. Sentiment and Message Volume on Nov 29 as of 9:10 a.m. ET | Source: Stocktwits

Shares of ASML Holding N.V. were up over 1% in early morning trading on Friday while retail sentiment around the stock remained in the ‘neutral’ (48/100) zone. 

Bernstein slashed its price target on the stock to $676 from $815 in anticipation of lower China spending given upcoming U.S. sanctions.

Shares of ASML are down 3% so far in 2024.

KLA Corp. ($KLAC)

KLA Corp. Sentiment and Message Volume on Nov 29 as of 9:00 a.m. ET | Source: Stocktwits

KLA Corp.’s shares were up 3% as markets opened on Friday. Meanwhile, retail sentiment around the stock dipped to ‘bullish’ (55/100) from ‘extremely bullish’ a day ago.

Shares of KLA Corp. have gained 15% so far in 2024. 

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