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Applied Materials, Jamba, NVIDIA and Nintendo highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – April 05, 2017 –Zacks Equity Research highlights Applied Materials (NASDAQ: AMAT Free Report ) as the Bull of the Day, Jamba (NASDAQ: JMBA Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA Corporation (NASDAQ: NVDA Free Report ) and Nintendo (OTCMKTS: NTDOY Free Report ).

Here is a synopsis of all four stocks:

Bull of the Day :

Applied Materials (NASDAQ:AMAT Free Report ) shares are up 10% since the company's February 15 earnings report that delivered another set of strong quarterly results and guidance. Analysts consequently raised earnings estimates and price targets, pushing shares back to a Zacks #1 Rank and keeping it there for the past six weeks.

AMAT develops, manufactures, markets and services semiconductor wafer fabrication equipment and related spare parts for the worldwide semiconductor industry. Customers for these products include semiconductor wafer manufacturers and semiconductor integrated circuit (IC) manufacturers, who either use the ICs they manufacture in their own products or sell them to other companies.

These ICs are the key components in most advanced electronic products such as computers, telecommunications devices, automotive engine management systems and electronic games.

UBS: New Display Tools Drive Capex and Growth

Back in February, UBS raised its price target on Applied Materials from $40 to $42 after the company guided its April quarterly sales and non-GAAP EPS to $3.5 billion and $0.76, both higher than the Wall Street consensus of $3.3 billion and $0.63, respectively.

The investment bank was encouraged by the company's innovations in equipment used to produce organic light-emitting diode, or OLED, displays. According to a WSJ report, Apple is planning to use an OLED display from Samsung Electronics for its next iPhone.

OLED displays are reported to be much better than traditional LCD panels. This would be great for the company which is a key supplier Samsung’s huge chip-fabrication business.

UBS analyst Stephen Chen said "We believe Applied can continue to outgrow display capex trends if it introduces new display tools such as an evaporation tool this year."

And on March 20, following his attendance at China Semicon, Chen upgraded his views on AMAT and boosted his price target to $44. StreetInsider.com provided the following notes from the UBS report.

Bear of the Day :

Sometimes a restaurant just knocks it out of the park. The stars align, their timing is right, and everything works out like it’s supposed to. Those times are very rare indeed. Sometimes you’re just in the right place at the right time. As a first-mover in a new, health-conscious juice craze,Jamba (NASDAQ: JMBA Free Report ) had it all figured out. But somewhere along the way, things went south.

That’s why today I’m naming Jamba as today’s Bear of the Day. If you don’t know Jamba, the company owns, operates, and franchises Jamba Juice stores. Its restaurants provide specialty food and beverage offerings, such as whole fruit smoothies, fresh squeezed juices and juice blends, and whole fruit and soymilk or fresh Greek yogurt, as well as various food items, including hot oatmeal, hot beverages, breakfast wraps, sandwiches, Artisan Flatbreads, baked goods, and snacks. The company also licenses its Jamba brand name to sell consumer packaged goods through retail channels, such as grocery stores, warehouse clubs, and convenience stores, as well as online.

The reason for the Zacks Rank #5 (Strong Sell) is the negative earnings estimate revisions from analysts. Analysts have come out and dropped their EPS numbers for the current quarter and next year., The bearish sentiment has cut the current quarter Zacks Consensus Estimate from breakeven to a 4 cent loss and shrank next year’s number from a 42 cent gain to a 38 cent gain.

Additional content:

Here's Why NVDIA Shares Slipped on Tuesday

Shares of NVIDIA Corporation (NASDAQ: NVDA Free Report ) opened nearly 5% lower on Tuesday after the release of a new analyst report from Pacific Crest that downgraded the stock and raised questions about desktop GPU demand, Nintendo Switch-related revenue, and Datacenter sales.

Analyst Concerns

Pacific Crest’s Michael McConnell downgraded NVDA to “Underweight.” The firm’s note also mentioned that the analyst views “downside in the shares to $90.”

McConnell’s primary concern seemed to be a continued slump in demand for desktop graphics processing units. The analyst noted that unit sales to China are declining 30% to 40% quarter-over-quarter, while unit sales to the United States are slipping about 20% quarter-over-quarter. The note also said that GPU orders to NVIDIA are unlikely to pick up until July given current inventories.

Furthermore, McConnell pointed out that desktop GPU manufacturers do not expect sales to grow this year. The firm noted concerns about difficult year-over-year growth comparisons and highlighted a lack of stimulation in the market.

McConnell also expressed concern about lower margins related to incremental Nintendo (OTCMKTS: NTDOY Free Report ) Switch revenue. The analyst said that the $400 million of incremental revenue from the new console may work to offset flat GPU sales, but the firm expects the lower margins of this console business to negatively impact earnings.

Finally, the note mentioned that quoted lead in NVIDIA’s Datacenters division have declined, which may indicate a “pause” in the business this summer.

Concern or Patience?

NVDA was a darling stock in the latter half of 2016, with shares gaining roughly 50% in the final two months of the year. Since then, things have been a bit less comfortable. Headed into Tuesday, shares were up just 2.5% year-to-date.

Nevertheless, the semiconductor industry continues to show strength, and NVIDIA’s recent maneuvering in the self-driving car market should help the company in the coming years, even if desktop GPU demand continues to slip.

Back in December, NVIDIA was granted a permit by the California Department of Motor Vehicles to start testing its self-driving car technology on the state’s roads. You can find out everything that the company has been up to in this field here: NVIDIA to Move Further into Autonomous Car Market .

For now, NVDA remains a Zacks Rank #3 (Hold).

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About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Applied Materials, Inc. (AMAT): Free Stock Analysis Report
 
Jamba, Inc. (JMBA): Free Stock Analysis Report
 
NVIDIA Corporation (NVDA): Free Stock Analysis Report
 
Nintendo Co. (NTDOY): Free Stock Analysis Report
 
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