Sometimes you forget how hard technology investing is. Applied Materials (AMAT) had been singing the praises not long ago of the very display division with which they had a shortfall. Given the long lead times of the business, you can't expect the orders to bounce back soon, especially because they are connected to cellphone which are very weak.
At the same time, they talked about discipline on the fronts of DRAMs and flash, leaving you to think that Western Digital (WDC) and Micron Technology (MU) should be fine.
Therefore, so should Lam Research (LRCX) , but these stocks all trade together, particularly Lam and Applied Materials so you will have to suffer for incorrect sins.
Making it even more difficult, the cellphone weakness once again calls into question Apple (AAPL) . If Applied Materials had reported before Apple it could have been curtains for the investors in Apple but that would have been wrong. Apple's sales were fine and the services inflected. Plus, these stocks are right in the cross hairs of the trade talks.
All of this, I think, will drive more people toward the remaining non-cell semis -- Action Alerts PLUS holding Nvidia (NVDA) for example -- data center and social media.
Or it will just drive people away, period. It does leave you a diminished set of techs to buy until you figure out who isn't guilty as you will now presume guilt.
You also have to believe this shortfall was totally unexpected -- forecasting issues -- given that the company bought back 4% of its shares outstanding this past quarter and will keep buying back, but they said at a slower level.
All in all, this was a distinctly suboptimal situation and won't be optimal again, sadly as it is a great company -- until cellphones pick up again.
