If you are an experienced investor or analyst, or good at what you do in investing or finance, I’m sure you will agree with this.

It is a pattern in semiconductor equipment investing where stocks tend to run ahead of the fundamentals, then wait for the fundamentals to catch up. Applied Materials is living that pattern right now, too.

On Sept. 28, Morgan Stanley cut its price target on Applied Materials (AMAT) to $563 from $642, according to a note shared with me at TheStreet. 

The chip equipment maker trades around $484, which means even after the cut, the target still implies 33% upside. 

Morgan Stanley is not bearish on the business. The rating stays Equal-weight. The business is…