APPLIED Materials forecast fourth-quarter revenue slightly above Wall Street estimates on Thursday (Aug 15), anticipating a surge in artificial intelligence (AI) fuelled demand for its chip-making equipment.
The booming demand for AI-powered chips has increased the need for sophisticated and expensive wafer fabrication equipment essential for chip manufacturing, benefiting companies such as Applied Materials.
A rise in demand for high-performance computing and data centres has also boosted the need for memory semiconductors such as dynamic random access memory and flash memory, in turn benefiting suppliers of chip-making tools.
Shares of Applied Materials fell 2.4 per cent in extended trading. They had closed about 5 per cent higher on Thursday.
“I think some of the aftermarket pullback is based on how much the stock went up today… the mixed sales report from China and the wide variance in their fourth-quarter forecast,” Michael Ashley Schulman, chief investment officer at Running Point Capital, said.
“Some analysts may have been looking for a more robust next-quarter forecast.”
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The largest US semiconductor equipment maker expects fourth-quarter revenue of about US$6.93 billion, plus or minus US$400 million, compared with analysts’ average estimate of US$6.92 billion, according to LSEG data.
It forecast adjusted profit per share between US$2.00 and US$2.36, compared with an estimate of US$2.14 per share.
The company reported third-quarter revenue of US$6.78 billion, beating an average estimate of US$6.67 billion. It reported 32 per cent of its total revenue from China, compared with 27 per cent a year earlier.
Its adjusted profit per share was US$2.12 per share, compared with a market estimate of US$2.02.
Applied Materials disclosed in May that it had received another subpoena from the US Department of Commerce, as regulators sought more information about shipments to China. REUTERS
