Tech & AI
Applied Materials forecasts higher sales as AI lifts chip equipment demand
Applied Materials forecast current-quarter revenue above analyst estimates, and its CEO credited AI demand. The shares rose slightly after hours, following a steep drop in Thursday's regular session.
Quick Read
- Applied Materials forecast current-quarter revenue above analyst estimates, and its CEO credited AI demand for chips.
- The shares gained modestly after hours, following a steep drop in Thursday's regular session.
- After-hours moves can shrink or reverse once Friday's full session opens.
- The stock remains far below its 52-week high despite the upbeat forecast.
What did Applied Materials forecast?
Applied Materials (Nasdaq: AMAT) expects revenue of about $11.1 billion in its current quarter, the company said after Thursday's close. That is above analyst estimates of $10.89 billion.
Why it matters: The company makes the machines chip factories use to build semiconductors. Its sales depend on how much chipmakers spend on new production.
Chief executive Gary Dickerson said in the results release that AI keeps driving extra demand for semiconductors. He said the company's tools leave it well placed for years of revenue and profit growth.
The quarter that closed its fiscal year also beat estimates on revenue and on adjusted earnings per share, the company reported.
How did the shares react?
The stock rose 0.7% in after-hours trading to $383.58. After-hours trading happens after the regular close, with far fewer buyers and sellers. Its moves often shrink or reverse once the full market opens.
That small gain followed a hard day. In the regular session, Applied Materials fell 3.6% to close at $380.95, and the company lost $11 billion in market value. The S&P 500 fell 0.4% the same day.
The shares sit 47.3% below their 52-week high of $723.00. Over a longer stretch, $1,000 invested a year ago would now be worth $1,651.
What is still open?
The forecast shows AI spending still reaching the toolmakers that equip chip factories. The open question is whether the after-hours gain holds when Friday's regular session brings full trading volume.
Borrowing costs rose on Thursday. The 10-year Treasury yield jumped 12 basis points to 5.10%.
Friday morning also brings the Producer Price Index for October, an early read on inflation that could move yields again.
For readers
What it could mean for you: If you own Applied Materials shares directly, the forecast is the company's own read on demand for its chip-making tools this quarter. Your stake carries that news in full. In a broad fund, the company is small. It accounts for 0.34% of the value of the 500 largest U.S. companies. Its regular-session drop took $12 from $100,000 spread across them by size. Whether orders match the guidance could show in the company's next quarterly report.
Questions and answers
What revenue did Applied Materials forecast?
Applied Materials forecast current-quarter revenue above what analysts had estimated. Chief executive Gary Dickerson said AI keeps driving extra demand for semiconductors.
How did Applied Materials stock react to earnings?
The shares gained modestly in after-hours trading on Thursday after a steep drop in the regular session. After-hours moves can shrink or reverse when full trading resumes.
What does Applied Materials make?
Applied Materials makes the equipment chip factories use to produce semiconductors. Its sales depend on how much chipmakers spend on production.
The numbers
| Applied Materials (AMAT) price | $380.95 |
|---|---|
| Applied Materials (AMAT) change | −3.58% |
| Applied Materials (AMAT) market value | $300 billion |
| Applied Materials (AMAT) 52-week high | $723.00 |
| S&P 500 change | −0.35% |
| 10-year Treasury yield | 5.10% |
Thursday’s close
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