The shares of Applied Materials (NASDAQ:AMAT) are on the downswing this morning, despite the tech manufacturing giant reporting fiscal third-quarter results that surpassed analyst estimates. Weighing on the equity is a $6.7 billion revenue forecast for the fiscal fourth quarter, which came in well below expectations of $7.3 billion. The company said overseas demand, especially in China, is slowing down amid semiconductor tariff talks.
At last check, AMAT was down 11.8% to trade at $166.11, following a downgrade from BofA Global Research to "neutral" from "buy," and a price-target cut to $180 from $190. At least eight other analysts cut their price targets as well. If losses hold, the security will mark its worst session since March 2020. In the last 12 months, shares have tumbled 22.9%.
Coming into today, 24 of 33 firms in coverage rated AMAT a "buy" or better, while the 12-month consensus target price of $196.85 is now a 20.3% premium to current levels. This leaves plenty of room for additional bear notes, which could pressure shares lower still.
Meanwhile, the stock's 10-day put/call volume ratio of 1.38 at the International Securities (ISE), Cboe Options (CBOE) and NASDAQ OMX PHLX (PHLX) sits higher than all other annual readings. This means options traders have much more bearish than usual lately.
Drilling down to today's options activity, 87,000 puts and 57,000 calls have been traded, which is 12 times the volume typically seen at this point. The most active contract is the August 180 put, where new positions are being opened.
