Latest news with #AppliedMaterials
Yahoo
2 days ago
- Business
- Yahoo
Morgan Stanley upgrades Applied Materials on derisked outlook for China
-- Morgan Stanley upgraded Applied Materials (NASDAQ:AMAT) to Equal-Weight from Underweight, citing a partially derisked outlook for China and its ICAPS business, but warned that weakness in leading-edge logic and DRAM remains a concern heading into fiscal 2026. With China and ICAPS are now derisked, and valuation is undemanding, as per the analysts. The firm's new price target is $158, based on 17 times its 2026 earnings estimate of $9.31, which it says is in line with Applied's historical average but still at a steep discount to peers like KLA and Lam Research (NASDAQ:LRCX). Morgan Stanley sees revenue from China and ICAPS, a segment catering to mature semiconductor nodes, stabilizing through October 2025 but not recovering. At the same time, the bank cut its forecasts for foundry logic and DRAM investments, which weigh on overall estimates. It expects Applied's DRAM revenue to fall 5% in FY25 and 12% in FY26. The firm's FY26 revenue and EPS estimates are 8% and 10% below consensus, respectively. Despite the bearish tone on parts of the business, Morgan Stanley said AMAT's current valuation and underperformance versus peers limit further downside. Still, any renewed U.S. export restrictions on semiconductor equipment to China could hurt the stock, Morgan Stanley warned, estimating potential revenue and EPS downside of over 20% in FY26 and FY27 in such a scenario. Upside risks include renewed investment from Intel (NASDAQ:INTC) and Samsung (KS:005930) in foundry operations, which the bank does not currently model. Related articles Morgan Stanley upgrades Applied Materials on derisked outlook for China U.S. Treasury, Commerce secretaries and Trade Representative to meet Chinese reps Neo Performance Materials stock surges on buyback plan Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
Yahoo
4 days ago
- Business
- Yahoo
AMAT Q1 Earnings Call: Revenue Misses, Margins and AI-Driven Demand Shape Outlook
Semiconductor machinery manufacturer Applied Materials (NASDAQ:AMAT) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 6.8% year on year to $7.1 billion. Its non-GAAP EPS of $2.39 per share was 3.4% above analysts' consensus estimates. Is now the time to buy AMAT? Find out in our full research report (it's free). Revenue: $7.1 billion (6.8% year-on-year growth) Adjusted EPS: $2.39 vs analyst estimates of $2.31 (3.4% beat) Adjusted Operating Income: $2.18 billion vs analyst estimates of $2.12 billion (30.7% margin, 2.6% beat) Revenue Guidance for Q2 CY2025 is $7.2 billion at the midpoint, roughly in line with what analysts were expecting Adjusted EPS guidance for Q2 CY2025 is $2.35 at the midpoint, above analyst estimates of $2.31 Operating Margin: 30.5%, up from 28.8% in the same quarter last year Inventory Days Outstanding: 142, up from 136 in the previous quarter Market Capitalization: $129.8 billion Applied Materials' first quarter performance was shaped by increased investments in leading-edge foundry and logic, as well as continued demand for semiconductors used in artificial intelligence (AI) applications. CEO Gary Dickerson highlighted the company's focus on enabling next-generation technologies such as gate-all-around transistors and advanced DRAM, stating, 'We are very well-positioned at major technology inflections in fast-growing areas of the market.' Despite challenges from trade restrictions, especially in China, Applied Materials saw broad-based growth across business segments, with the Semiconductor Systems segment benefiting from customers' accelerated adoption of new chip architectures. The company also cited gains in its advanced etch and process diagnostics products as contributors to margin expansion. Looking ahead, Applied Materials' guidance is underpinned by anticipated acceleration in leading-edge foundry-logic and continued strength in DRAM and NAND upgrades, particularly those tied to AI data center investments. CFO Brice Hill explained, 'We expect the core [services] to grow at low double digits during the year, even with the impacts from lower China business due to trade restrictions.' Management emphasized the durability of demand for AI-enabling semiconductor technologies and highlighted ongoing investments in new product innovation and high-velocity co-innovation with customers. The company cautioned that macroeconomic volatility, tariffs, and evolving trade policies remain risks to its outlook, but maintained that its diversified manufacturing and supply chain footprint provide flexibility to navigate these challenges. Management pointed to robust demand for AI-related semiconductor technologies and highlighted recent product advances, while acknowledging near-term headwinds from China trade restrictions and segment-specific softness. AI and advanced logic demand: Growth was driven by strong customer investments in advanced logic and DRAM technologies, with particular emphasis on AI data center applications and high-bandwidth memory, which management expects to be major market drivers for the next several years. China trade restrictions' impact: The company experienced continued headwinds in China, especially in its services and 200-millimeter equipment business, due to expanded U.S. export controls. Management noted these restrictions led to weaker near-term performance for Applied Global Services (AGS) but expects core service revenue (excluding 200mm) to grow at low double digits through the year. Product innovation and adoption: New products, including the Sym3 Magnum etch system and Cold Field Emission eBeam technology, have seen rapid market adoption, supporting revenue growth and margin improvement. The Sym3 Magnum generated over $1.2 billion in revenue since its launch in February 2024. Margin improvement initiatives: Profitability benefited from favorable product mix, ongoing cost management, and value-based pricing strategies. Management believes recent cost improvements and better value capture will support sustainable margin expansion in future periods. Diversified manufacturing and supply chain: Applied Materials leveraged its global supply chain flexibility to mitigate the effects of tariffs and supply chain disruptions. The company's ability to shift production and duplicate sources globally has limited the near-term financial impact from changing trade policy and geopolitical risks. Applied Materials' forward outlook is shaped by accelerating AI-related demand, ongoing product innovation, and the company's ability to manage external risks such as tariffs and trade dynamics. AI-driven semiconductor investments: Management expects continued robust demand for advanced logic, DRAM, and packaging solutions supporting AI infrastructure, with leading-edge foundry-logic acceleration set to offset weakness in mature ICAPS segments. Investments by cloud service providers and leading chipmakers are projected to drive sustained growth in wafer fab equipment. Service segment growth and recurring revenue: The company anticipates core service revenues, excluding 200-millimeter equipment, will grow at a low double-digit rate, supported by an increasing share of subscription-based agreements and recurring business. However, trade restrictions in China are expected to limit growth in certain service and equipment categories in the near term. Margin resilience amid external pressures: Management highlighted ongoing margin expansion efforts through cost control, pricing discipline, and flexible manufacturing. While tariffs and macroeconomic volatility present ongoing risks, the company expects operating margins to remain in the low-48% range, with further improvements possible through operational initiatives. In the coming quarters, the StockStory team will focus on (1) the pace of adoption for new AI-related semiconductor technologies and the resulting impact on leading-edge foundry and logic revenue, (2) whether service segment growth can maintain momentum despite ongoing China trade restrictions and 200mm equipment headwinds, and (3) progress toward sustainable margin expansion through cost management and product mix. The continued ramp of advanced packaging and further penetration of subscription-based services will also be key indicators of execution. Applied Materials currently trades at a forward P/E ratio of 17.2×. Should you double down or take your chips? Find out in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
Implied Volatility Surging for Applied Materials Stock Options
Investors in Applied Materials, Inc. AMAT need to pay close attention to the stock based on moves in the options market lately. That is because the Jul 18, 2025 $95 Call had some of the highest implied volatility of all equity options today. Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy. Clearly, options traders are pricing in a big move for Applied Materials shares, but what is the fundamental picture for the company? Currently, Applied Materials is a Zacks Rank #3 (Hold) in the Electronics - Semiconductors industry that ranks in the Top 34% of our Zacks Industry Rank. Over the last 30 days, five analysts have increased their earnings estimates for the current quarter, while three analysts have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from $2.32 per share to $2.34 in that the way analysts feel about Applied Materials right now, this huge implied volatility could mean there's a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected. Check out the simple yet high-powered approach that Zacks Executive VP Kevin Matras has used to close recent double and triple-digit winners. In addition to impressive profit potential, these trades can actually reduce your to see the trades now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
31-05-2025
- Business
- Yahoo
Applied Materials (AMAT) Sees 40% DRAM Revenue Growth in 2025, Mizuho Maintains Outperform
Mizuho analyst Vijay Rakesh recently lowered the price target on Applied Materials, Inc. (NASDAQ:AMAT) to $195 from $205 and kept an Outperform rating on the shares. AMAT provides equipment, services, and software for the semiconductor industry. The company reported an in-line quarter but faces headwinds in China, the analyst told investors in a research note. A technician in a clean room assembling a semiconductor chip using a microscope. The firm recently posted earnings for the second fiscal quarter, with Gary Dickerson, President and CEO, reporting that his firm delivered strong results across the board, including record earnings per share. Dickerson stated that Applied is well-positioned in areas such as AI, foundry-logic, advanced DRAM, packaging, and power devices. He highlighted that in 2025, AMAT expects revenues from advanced DRAM customers to grow more than 40% as it ramps investments in DDR-5 and high-bandwidth memory. Dickerson revealed strong market adoption of new products, noting that the Sym3 Magnum etch system for advanced patterning has generated more than $1.2 billion of revenue since launched in February 2024. While we acknowledge the potential of AMAT, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AMAT and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 33 Most Important AI Companies You Should Pay Attention To and 30 Best AI Stocks to Buy According to Billionaires Disclosure: None. Sign in to access your portfolio
Yahoo
29-05-2025
- Business
- Yahoo
Applied Materials (AMAT) Sees 40% DRAM Revenue Growth in 2025, Mizuho Maintains Outperform
Mizuho analyst Vijay Rakesh recently lowered the price target on Applied Materials, Inc. (NASDAQ:AMAT) to $195 from $205 and kept an Outperform rating on the shares. AMAT provides equipment, services, and software for the semiconductor industry. The company reported an in-line quarter but faces headwinds in China, the analyst told investors in a research note. A technician in a clean room assembling a semiconductor chip using a microscope. The firm recently posted earnings for the second fiscal quarter, with Gary Dickerson, President and CEO, reporting that his firm delivered strong results across the board, including record earnings per share. Dickerson stated that Applied is well-positioned in areas such as AI, foundry-logic, advanced DRAM, packaging, and power devices. He highlighted that in 2025, AMAT expects revenues from advanced DRAM customers to grow more than 40% as it ramps investments in DDR-5 and high-bandwidth memory. Dickerson revealed strong market adoption of new products, noting that the Sym3 Magnum etch system for advanced patterning has generated more than $1.2 billion of revenue since launched in February 2024. While we acknowledge the potential of AMAT, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AMAT and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 33 Most Important AI Companies You Should Pay Attention To and 30 Best AI Stocks to Buy According to Billionaires Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
