Applied Materials (AMAT) Forecasts Strong Growth in Q4 2024

What You Need To Know

Applied Materials (NASDAQ: AMAT) is expecting a strong Q4 2024, with projected revenue of about $6.93 billion and earnings per share (EPS) of $2.18. The company is seeing solid growth in its Semiconductor Systems and AGS segments, driven by rising demand for AI, better material engineering, and a focus on energy efficiency.

Despite the positive forecast, its shares fell 3% in extended trading after a 5% gain earlier. The company anticipates revenue around $6.93 billion and adjusted profit per share between $2.00 and $2.36. Third-quarter results showed revenue of $6.78 billion, beating expectations, with an adjusted profit per share of $2.12. However, revenue from China declined 24% to $2.15 billion. Applied Materials competes with Lam Research, ASML, and KLA Corp.

Looking ahead, Applied Materials expects double-digit growth in its AGS revenue, particularly in advanced packaging. They are also optimistic about a significant revenue boost from new semiconductor technology called gate-all-around nodes, despite Intel cutting back on its spending.

Applied Materials provides semiconductor manufacturing equipment and services to major chipmakers, including Intel. This equipment is critical for producing advanced semiconductors, which are essential for Intel's processors and other products. The relationship between AMAT and Intel is significant because Intel relies on AMAT's technology to stay competitive in the semiconductor industry. Despite Intel's recent cuts in capital expenditures (CapEx), Applied Materials remains optimistic about demand for its equipment, particularly for advanced technologies like gate-all-around nodes.

In Q3, the company's services sector grew by 8%, and more growth is expected. Key trends include increasing demand for advanced semiconductors due to AI and a focus on energy efficiency. Looking forward, there is a growing need for integrated solutions and collaboration, with strong potential for expansion in advanced packaging and global markets.

Why This Is Important for Retail Investors

1. Revenue guidance and growth projections provide insight into Applied Materials' financial health and future potential, helping retail investors assess the company's performance and potential investment opportunities.

2. Updates on key business segments like Semiconductor Systems and AGS offer retail investors a clearer picture of where the company's revenue is coming from and which areas are driving growth.

3. Forecasts on advancements in AI-driven demand and energy efficiency signal potential market trends that could impact Applied Materials' stock performance, enabling retail investors to make informed decisions.

4. Information on future revenue growth in AGS and advanced packaging allows retail investors to gauge the company's strategic direction and market positioning, helping them evaluate the long-term investment viability of Applied Materials.

5. Insights into industry themes like the growing demand for advanced semiconductors, collaborative innovation, and global expansion provide retail investors with broader context on market trends and opportunities, aiding in their investment strategies and portfolio diversification.