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Applied materials (NASDAQ:AMAT) led semiconductor shares higher on Monday as investors weighed in on the latest moves by the US government to support financial institutions amid concerns about a bank run.
Applied Materials (AMAT) rose 1.8% after the company announced a 23% increase in its quarterly dividend and a new $10 billion share buyback program.
Applied Materials (AMAT) now pays 32 cents per declared share, with the next payout to shareholders of record May 25 through June 15.
The new buyback program replaces an existing program, which had $4.7 billion remaining at the end of the first quarter.
Lam Research (NASDAQ:LRCX) erased earlier losses when investment firm Bernstein downgraded the semiconductor capital equipment company, citing valuation concerns.
“(Lam Research) is more expensive and has been close to our target price for some time; as we believe there remains considerable uncertainty surrounding memory, it seems prudent to step aside for now, although we still like the story at long-term,” analyst Stacy Rasgon wrote in a note to investors.
KLA Corp. (KLAC) and ASML Holding (ASML), which also make semiconductor equipment, rose 0.4% and 1.3%, respectively.
nvidia (NASDAQ:NVDA) shares rose nearly 1% after Microsoft (MSFT) unveiled a new virtual machine that uses the company’s H100 GPUs and Citi said it was among the chip shares to own.
Analyst Christopher Danely noted that investor sentiment for the sector as a whole is slightly bullish, but is more bullish on individual names, as “a lot of bears (are) raising the white flag,” notably Nvidia (NVDA), AMD (AMD), Microchip Technology ( MCHP) and semiconductor equipment companies.
“We think there is a lot of FOMO out there, where bears give up and chase stocks, leading to short squeezes,” Danely wrote in a note to investors, adding that much of the bearish thesis centers on a bearish outlook. solid for the second half. paid by companies.
AMD (AMD) shares rose 1.3%, while Microchip (MCHP) shares rose 0.9%.
Qualcomm (NASDAQ:QCOM) shares rose nearly 0.8% as the company seeks to overturn a $258 million antitrust fine imposed on it by the European Commission.
Other chip stocks also gained on Monday, including Texas Instruments (TXN), Qorvo (QRVO), Skyworks Solutions (SWKS), among others.
On Friday, it was reported that the Biden Administration may impose new restrictions on technology and products that can be sold to Chinese companies, which could affect Applied Materials (AMAT) and other chip companies.
