Applied Materials Stock Dips After Analyst Issues Sector-Wide Downgrade

AMAT is just below its year-over-year breakeven point

Exactly one week after inking a deal with Japanese chipmaker Kokusai Electric, tech stock Applied Materials, Inc. (NASDAQ:AMAT) is suffering a pullback. The catalyst behind this morning's decline looks to be a bear note out D.A. Davidson, specifically a downgrade to "neutral" from "buy" and price-target cut to $45 from $55.

The brokerage firm issued a sector-wide downgrade for semiconductor stocks, saying the delay in memory recovery, falling prices, and geopolitical turmoil with China is weighing heavy. In response, AMAT was last seen down 1.9% at $43.14.

Overall analyst attention had been optimistic ahead of today's note. Specifically, 11 of the 17 covering firms sport a "buy" or "strong buy" recommendation, with just six "hold" and zero "sell" ratings accounted for. Further, the stock's average 12-month price target of $51.10 comes in 16.2% above Friday's close of $43.98.

Technically, Applied Materials stock has climbing the charts long term. During the month of May, however, the shares repeatedly pulled back near the $39 floor, which ran in line with the 200-day moving average. Year-over-year the stock remains just below breakeven, but year-to-date boasts a 34.3% lead.