Goldman Sachs Suggests Buying Put Spreads on Applied Materials

Goldman Sachs is out with a research note this morning, where it suggests that traders buy put spreads on Applied Materials AMAT ahead of earnings. The Goldman Sachs analyst expects AMAT to guide revenues for next quarter down 10% to 15% qoq, versus Street expectations of down 4% qoq. Novellus NVLS, a peer of AMAT, saw 2Q11 orders decline 25% qoq, and guided 3Q11 orders to be flat to down 20% qoq. Another competitor, KLA-Tencor KLAC, guided 3Q orders down 35% qoq at the mid-point and noted that industry fundamentals had declined in the two weeks since SEMICON. The analysts suggest buying the September $12/12 put spread for $0.74. Applied Materials, Inc. provides manufacturing equipment, services and software to the global semiconductor, flat panel display, solar photovoltaic and related industries.