 Hey everyone, this is Dan. Applied materials has been doing pretty well in the past year. Will the price continue to go up? Let's look at the details. This is the daily chart for the last year. We can see applied materials, stock symbol AMAT, which is the candlestick chart here, went up by 139% during the last year. SPY, which represents the movement of the S&P 500 index, went up. By about 40%, and the same with QQQ, which represents the movement of the NASDAQ 100 index. Definitely, applied materials outperform the broad market by the wide margin. If you look at the six-month chart, same, applied materials is a lot better. It went up 68%, whereas the broad market went up by only about 15%. As of closing on June 29th, the price was at $141.92. My prediction is that applied materials will be at $162 a year or higher by the end of September 2021. In the next few minutes, I'll be talking about the industry overview. And we'll look at a competitive position of applied materials, compared to the other major players in that particular industry segment. We'll be looking at the most important news in the last couple of months that might have affected the stock price. And then we're going to the charts to do technical analysis. Then we will look at the analyst opinions and my own evaluation of the company. And then finally, I'll talk about my stock trading strategies for applied materials. Applied materials provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. It has three major segments. Number one is the semiconductor systems. Number two, applied global services. And number three, display and adjacent markets. We'll talk more about these three segments later on. Who are their main competitors? Now, in the part that's related to semiconductor systems, where they produce deposition and edge equipment, they compete with land research and Tokyo Electron. And in the metrology and inspection equipment areas, they compete against ASML and KLA. The other thing that's very important as far as industry trend is that when the foundry, logic companies start moving away from the DUV, which is the acronym for Deep Ultraviolet Technology, and which requires this multiple patterning steps. And that's apparently where a lot of the applied materials, businesses are concentrated. And as the industry moved away from DUV and moving to EUV, which is the extreme ultraviolet technology, the deposition edge steps are minimized, thereby reducing the need for the tools from applied materials, KLA-C, and Tokyo Electron. This chart will tell you to what extent that shift has been changing. The top line here is applied materials. As you can see, they have since 2004 to today experienced a little bit of a decline as far as market share. And then if you look at ASML, which is a gray line here, because ASML, they pretty much have the monopoly on the EUV market, the lithography equipment. And since that segment of the market has been growing, their market share has been growing also. And then also LRCX, land research, they have been growing market share as well. It looks like to the expense of applied materials. And Tokyo Electron, TOE-LY, the light blue line here. And then KLA-C has been pretty much flat. These are the leading equipment and technology suppliers for the semiconductor industry. They supply the founders. But overall, applied material is still pretty strong. There are still the industry leaders you can see here. And good news is that in the last year, between 2019 and 2020, there's a nice uptake in the market share. And hopefully that positive trend will continue. If you like what you've seen so far, I'd like to encourage you to click the like, subscribe and notification button, because that'll encourage me to make more videos like this and it will help YouTube direct more viewers to my channel. Thank you very much. Let's continue. As far as recent events, as you probably know already, there's a very severe global chip shortage going on. And looks like this shortage is probably going to last at least until 2023. It pretty much touches on not just the automobile industry, but also of course the computer equipment businesses, as well as home appliances. And this article is talking about the shortage might last until 2023. Because of the shortage, Intel announced that they will invest $20 billion to build two new fat plants in Arizona. And then after that, Taiwan semiconductor said that they would invest $100 billion in the next three years to build foundries. And then after that, Samsung said they were going to invest $151 billion through 2030 to increase their capacities. So that's a lot of money being spent on building foundries. And when they build foundries, they will end up buying equipment from applied materials, ASML, and all these major leading companies in that segment. And I also have published videos covering ASML. You might want to check them out. But this particular video is specifically about applied materials, which I'm very bullish on as well. Also, EU has been talking about building up their own foundries to avoid any future shortages of semiconductor. And they currently represent 10% of the semiconductor market. That's why it is a very substantial piece of the market. But they haven't announced any firm investment numbers yet. With all the bullish signs about the semiconductor industry and about applied materials, I'd like to caution you that the picture is not going to be rosy forever. If you look back in history, this is applied materials net income. Currently, of course, they're riding high in the last couple of years. If you look back, it was DIP in 2013, they actually went into negative net income. And of course, 2009, when we had a worldwide recession, they also suffered losses for about three years. But just not particular to applied materials. If you look at the auto industry leader, ASML, whose market share has been growing even faster than applied materials in the last few years, they also suffer a DIP in 2009 and a DIP in 2013. Although the DIP here was not nearly as severe as a DIP experienced by applied materials. These two charts remind us that the industry is not going to be in a bullish situation forever, even though we are experiencing high profit levels now, but we need to be mindful of the fact that eventually it'll come down and there might be even losses in the future. That's why we need to look at the news events as well as the charts very carefully to know when to buy and when to sell. This is straight from the 10K report, the annual report from applied materials. The table here tells us how much money the revenues each particular segment has been making and the operating income loss from each of the segments. I translate these numbers into percentages. From here, you can say that the leading segment definitely is a semiconductor systems segment. And if you compare 2018, 2019, and 2020, the percentage of revenues from this particular segment grew from 63% or actually decreased by 1% or 62, then it went up to 66%. More impressively, the operating income went from 77% to over the 74% and then in 2020 jumped up to 85%. And then applied global services occupied 24% of the net sales and 26% of the operating income. So that's the number two segment for the company and the display and adjacent market is only 9% of the net sales and 7% of operating income. So that's a very small slice of the pie. It's good news that the semiconductor systems segment is growing faster than the other segment because I believe this particular segment is more protected by their experiences and intellectual properties. Let's look at the analyst's opinions. Again, the closing price on June 29, 2021 was $141.92 and my target is $162. And I'll tell you in a minute how I calculated that. Yahoo gave them a buy rating and the high target is 195. Definitely way higher than the current price. The average target is 161. Very close to my target and the low target is 125. Roots and level here gives them a B buy rating, which is pretty good. Took ranks.com, gives them a strong buy and the high target is 196. Average target is 160. Low target is 139. CN Money gives them a buy rating. The high target is 195. Medium target 162 and low target 125. So if you look at the medium targets here, they're all pretty close to about 160, 162. Much higher than the current price. That's a very bullish scenario for applied materials. I always like to do my own calculations so I can understand how those other analysts get to their answers and sometimes my answer might be a little bit different from the other analyst's answer sometimes. Pretty much the same. What I did was that I took the current net earnings, the 12-month net earnings for applied materials, the current PE ratio and the current market cap and a stock price that about three days ago when the closing price was 141.76 cents. And from these numbers, I also used the assumption that the earning growth will be at about 24.9% a year and that's based on the earnings growth in the last three, four years. Also for PE ratio in the future, instead of using 29.2, which is pretty high, I took a discount that I want to be conservative. I only use the PE ratio of 23.4 for future years. And based on the current numbers and the assumption of earnings growth and PE ratio, I'm able to arrive at the stock prices for 2021, 2022, and 2023. And then to be extra conservative, I took the 10% discount of the three numbers and arrived at these three numbers. Then I averaged them and got to my forecast number of $162. I believe applied materials were likely to go even higher than that, but I usually want to be conservative and that's why I'm tentatively setting my short-term target $162 to be achieved by the end of September. Later on, if the price gets to that point, it gets above that, I will most likely revise this up. And when I do that, I'll either publish a new video or I will send out a Twitter message to alert my subscribers. Let's look at the charts and talk about technical analysis. This is the daily chart for the last few months. We can see the price has been pretty much flat. First, we see this overboard signal here on the RSI back in April and sure enough, the price started to drift down a little bit. And since then it's been going up and down and so far it hasn't been able to exceed that previous peak at 146 yet, but we're getting pretty close to that point. And then on the DMI indicator, we saw a recent bullish buy signal and MACD, a bullish buy signal. The most important part is that the current price is really approaching that 146 points. So it'll be critical to see whether the price will be able to break through that. If it can break through that, it will be a very bullish sign. Although we do see a higher high here, so it's a bullish sign also, but we just definitely need to exceed that previous peak. Let's look at the support and resistance levels for support. The current price now 141.92. The next level of support is 137, which is a 20-day simple moving average right here in the middle of the Bollinger Band. And the next level down will be 132, which is a lower Bollinger Band here. And then the next level of support will be at a 100-day simple moving average, the yellow dash line. And the next level down will be the 121, which is this historical support point. And then the next level down 118, this point. And then the next level down 114, this level. For resistance, the next level of resistance, which is a very strong resistance, is going to be at 146, which is the all-time high. And then the next level up will be actually from the Fibonacci extension, 23% at 154. And then the next level up Fibonacci extension, 38% at 158. And then the next level up 162, which is the 50% Fibonacci extension. Let me recap my price forecast. The current closing price is 141.92. My forecast is $162 to be reached by the end of September 2021. What are my strategies for applied materials? First, I will buy when the price bounces up from support level and sell when the price pulls back from resistance levels. And of course, if the price can beat the all-time high, and that'll be a very bullish sign, I'll most likely buy some more shares. I currently do hold some shares of applied materials already. And I'm holding some shares for the long term, because at least for the next two, three years, I'm very bullish on applied materials. But in meanwhile, swing trade the rest at the appropriate support and resistance levels. And I'll definitely be monitoring news events in case they alter the direction of the stock price. I'd like to mention that, even though I hold shares of applied materials, I will not pump the stocks relentlessly. For the viewers who've been following my videos, you will know that occasionally, I will tell people that I sold shares because there's a short-term peak that was reached and the price is drifting downward. Or I might say that I'm not buying for now because it's looking very bearish, even the long term. I'm bullish on a stock, but I'll just wait for a few more days until the chart becomes a little more bullish before I buy in. And often when I buy or sell stocks for the companies that I follow with my YouTube videos, I will alert my subscribers by way of my Twitter account. I'd like to remind you that, if you like what you've seen, please click the like, subscribe, and notification button. That'll encourage me to make more videos like this, and it will also encourage YouTube to direct more viewers to my channel. Thank you. Let's continue. My Twitter account is Dan, MarketSpaceL. I'd like to encourage you to subscribe to my Twitter account as well as to my YouTube channel that way you can get the latest updates on my stock trades, as well as any alerts that I sent out about the most recent news events that might have affected some of the stocks that I've been following. You can certainly also send me your comments, questions, and suggestions by way of my YouTube channel and my Twitter account. I'd like to remind you that I'm not a financial advisor. I share my stock trading strategies for educational and entertainment purposes only. If you want to sell or buy stocks, you should make your own decisions. And you should definitely consult with your financial advisors before you do so. This is about wraps up my video for now. I thank you for watching. How do we do here? And I'll chat with you again in the next few days. In the meanwhile, I'd like to wish you the best of luck with your financial investments.