Applied Materials, Inc.

“Applied Materials is one of the best broad semiconductor equipment businesses in the world, with a durable moat, strong capital returns, and a long runway tied to rising chipmaking complexity and installed-base monetization. However, the current valuation appears to price in a great deal of future success already, leaving limited margin of safety and raising the risk of disappointing shareholder returns even if the business continues to perform well. This is a strong business but an unattractive entry point.”