Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>In the first quarter of fiscal year 2025, Applied Materials demonstrated strong performance, achieving record revenue levels that surpassed previous highs.</li><li>The company announced that advanced semiconductors are a significant driver of this growth, supported by trends in technology such as artificial intelligence (AI), which are reshaping the global economy.</li><li>AI, identified as a major transformative technology, has supported approximately a 20% year-over-year growth in global semiconductor sales in 2024, with projections suggesting this market could exceed $1 trillion in annual revenue by 2030.</li></ul>

In the first quarter of fiscal year 2025, Applied Materials demonstrated strong performance, achieving record revenue levels that surpassed previous highs.The company announced that advanced semiconductors are a significant driver of this growth, supported by trends in technology such as artificial intelligence (AI), which are reshaping the global economy.AI, identified as a major transformative technology, has supported approximately a 20% year-over-year growth in global semiconductor sales in 2024, with projections suggesting this market could exceed $1 trillion in annual revenue by 2030.

Applied Materials (AMAT): Is It The Ultimate Winner in Gate-All-Around Transistor Innovations?

<ul><li>Applied Materials, Inc. recently reported its fourth quarter and fiscal year 2024 results, revealing several facets that contribute to its investment thesis.</li><li>The company recorded record revenue and earnings, marking five consecutive years of growth.</li><li>This performance underscores the competency of its strategy and execution, driven by the global team's hard work.</li></ul>

Applied Materials, Inc. recently reported its fourth quarter and fiscal year 2024 results, revealing several facets that contribute to its investment thesis.The company recorded record revenue and earnings, marking five consecutive years of growth.This performance underscores the competency of its strategy and execution, driven by the global team's hard work.

Applied Materials (AMAT): China Market Trends & Normalization Driving Our Optimism! - Major Drivers

Technology / Semiconductor / Internet Research

Nicolas Baratte

<ul>
<li>Management reiterates 1) growth accelerating on Advanced Logic (Gate All Around, Back Side Power), Advanced Packaging incl HBM, DRAM capacity additions  2) improving margins  3) energy-efficient computing driving materials innovation.</li>
<li>The risk is Mature node Capex slowdown in China, which we think is underestimated for 2025. China revenue: AMAT 30%, ASML 47%.</li>
<li>AMAT is trading at reasonable multiples on modest Consensus expectations, upside possible as 2nm and HBM accelerate. ASML is trading on rich multiples, on rich expectations, less room for upside.</li>
</ul>


Management reiterates 1) growth accelerating on Advanced Logic (Gate All Around, Back Side Power), Advanced Packaging incl HBM, DRAM capacity additions  2) improving margins  3) energy-efficient computing driving materials innovation.
The risk is Mature node Capex slowdown in China, which we think is underestimated for 2025. China revenue: AMAT 30%, ASML 47%.
AMAT is trading at reasonable multiples on modest Consensus expectations, upside possible as 2nm and HBM accelerate. ASML is trading on rich multiples, on rich expectations, less room for upside.


Applied Materials: The Stock Is Reasonably Valued on Modest Expectations. More Attractive than ASML.

Asia and Global Semiconductor and Tech Research

Andrew Lu

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.</li>
<li>
<strong>No more Moore's Law</strong>: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.</li>
<li>Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.</li>
</ul>


TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.

No more Moore's Law: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.
Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.


What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

Thematic (Sector/Industry)

<ul>
<li>During MOI correction period, global semi equipment and manufacturing vendors might under-perform semi product companies on sales/earnings and share price performance in next 6 months given utilization remains below 80%.</li>
<li>A healthy MOI correction in PC/smartphone semi might result in global logic MOI to fall to 3.7-3.8 months in 3Q23, down 15% q/q and 8% y/y, heading to historical low. </li>
<li>China fabless reduced MOI to 6.4 months in 3Q23, down 16% q/q and 26% y/y. Although 2x over 3.5 months low, we expect 4-5 months in future due to restrictions.</li>
</ul>


During MOI correction period, global semi equipment and manufacturing vendors might under-perform semi product companies on sales/earnings and share price performance in next 6 months given utilization remains below 80%.
A healthy MOI correction in PC/smartphone semi might result in global logic MOI to fall to 3.7-3.8 months in 3Q23, down 15% q/q and 8% y/y, heading to historical low. 
China fabless reduced MOI to 6.4 months in 3Q23, down 16% q/q and 26% y/y. Although 2x over 3.5 months low, we expect 4-5 months in future due to restrictions.


More Signs of Fab Utilization Recovery Starting Mid-2024 Post Current MOI Correction

United States

Applied Materials, Inc. develops, manufactures, markets, and services semiconductor wafer fabrication equipment and related spare parts for the worldwide semiconductor industry.  The Company's customers include semiconductor wafer and integrated circuit manufacturers, flat panel liquid crystal displays, solar photovoltaic cells and modules and other electronic devices manufacturers.

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Applied Materials (AMAT US)

Applied Materials (AMAT): Is It The Ultimate Winner in Gate-All-Around Transistor Innovations?

In the first quarter of fiscal year 2025, Applied Materials demonstrated strong performance, achieving record revenue levels that surpassed...

Baptista Research

Applied Materials (AMAT): China Market Trends & Normalization Driving Our Optimism! - Major Drivers

Applied Materials, Inc. recently reported its fourth quarter and fiscal year 2024 results, revealing several facets that contribute to its...

Baptista Research

Applied Materials: The Stock Is Reasonably Valued on Modest Expectations. More Attractive than ASML.

AMAT 4Q24: small beat, 1Q25 guidance inline. The stock is reasonably valued on reasonable / modest Consensus expectations. We think AMAT is more...

Nicolas Baratte

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference? TSMC revises down 2024 global semi y/y sales from over 10% to...

Andrew Lu

More Signs of Fab Utilization Recovery Starting Mid-2024 Post Current MOI Correction

More Signs of Fab Utilization Recovery Starting Mid-2024 Post Current MOI Correction. During the period, global semi equipment and manufacturing...

Andrew Lu

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