CAMT - Camtek: Why The AI Story May Have Been Overplayed

2024-04-24 10:33:02 ET

Summary

• The stock has risen thanks to AI enthusiasm in the stock market, but the real impact of AI on CAMT may be overstated.
• The year 2024 is expected to be a great year for CAMT, but the stock rally has nonetheless slowed down for several reasons.
• The Company faces a number of potential headwinds in a number of areas, short-term and long-term, which may be what is holding the stock back.
• There is reason to be long Camtek, but there is arguably more reason to be on the sidelines taking everything into account.

Camtek ( CAMT ), a supplier of metrology, inspection equipment and related software for the semiconductor industry, is one of the companies that benefited from the surge in interest in potential artificial intelligence or AI plays in the past 12 months. The stock, for instance, has tripled in value in the past 12 months, and that's with a recent pullback in the stock. Still, the stock has wavered in recent weeks for a couple of reasons, especially in recent days with the AI thesis coming under pressure. Many AI plays are under closer scrutiny as a result, and there may be reason to question whether the AI boost is being overplayed in the case of CAMT. Why will be covered next?

The rally in the stock has lost steam

A previous article from almost a year ago or May 2023 rated CAMT a hold after concluding that even though the stock was stuck in a holding pattern at that time, there was reason to think the stock was priming itself for a move higher in the near term. The article noted, for instance, how the stock was repeatedly stopped in its tracks close to a Fibonacci retracement level, which helped explain why the stock was dealing with resistance in the $27-29 region....

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