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Globe and Mail
21-05-2025
- Business
- Globe and Mail
Should You Buy, Sell or Hold Applied Materials Stock Post Q2 Earnings?
Applied Materials AMAT shares have lost 5.3% since it reported financial results for the second quarter of fiscal 2025 on May 15. Though the company's second-quarter top and bottom lines surpassed the Zacks Consensus Estimate, declining revenues in the Chinese market weighed on the investors' sentiments. The year 2025 has remained highly volatile for AMAT stock, with its share price rising mere 1.9% year to date. The stock has also underperformed other semiconductor players, including Lam Research LRCX, KLA Corporation KLAC and ASML Holding ASML. The underperformance of AMAT's share price, along with concerns related to China sales prospects, raises the question: Should investors buy, hold or sell AMAT stock? Declining China Sales: A Key Concern for AMAT's Prospects A major headwind for Applied Materials is increasing U.S.-China tensions and export restrictions on semiconductor manufacturing equipment. China remains a crucial market for Applied Materials, accounting for a significant portion of total revenues. However, U.S. government restrictions on selling advanced semiconductor equipment to Chinese manufacturers are hurting Applied Materials' sales and growth outlook. In the second quarter of fiscal 2025, Applied Materials' China sales plunged 37.3% year over year to $1.77 billion. China market's contribution to total revenues also shrank to 25% from the year-ago quarter's 43%. This marked the third consecutive quarter of a year-over-year fall in China revenues. Earlier, management had acknowledged that the company faces elevated uncertainty in China due to ongoing geopolitical tensions and regulatory scrutiny. If stricter export controls are imposed, Applied Materials' long-term revenue potential could take a hit, as Chinese chipmakers are forced to turn to domestic alternatives or non-U.S. suppliers. However, despite the headwinds, AMAT has several upsides that enable the company to perform well. AMAT Leads the Market With Superior Technology Applied Materials is well-positioned to capitalize on the demand for AI-driven semiconductors that has become the driving force for this industry. AMAT has made significant strides in cutting-edge chip manufacturing, particularly in gate-all-around (GAA) transistors, high-bandwidth memory and advanced packaging. These innovations are critical to enabling faster, more energy-efficient AI processing. Applied Materials' revenues from advanced semiconductor nodes surpassed $2.5 billion in fiscal 2024, and management expects this figure to double in fiscal 2025. The transition from FinFET to GAA transistors is expanding AMAT's total addressable market by 15%, while Applied Materials' revenues in this segment are projected to grow 30% per wafer fab capacity expansion. The company is also on track to secure more than 50% of the market share in GAA and backside power delivery, solidifying its leadership in the AI computing era. The advanced packaging segment has become an increasingly critical part of Applied Materials' business, with revenues tripling over the past four years to $1.7 billion in fiscal 2024. AMAT has secured volume orders from leading-edge customers for its Integrated Hybrid Bonding technology, strengthening its position in next-generation chip manufacturing. The upcoming EPIC Center in Silicon Valley, expected to go live in 2026, will further drive innovation in semiconductor packaging and process technology. In its most recent earnings report, AMAT highlighted that the company is well-positioned to gain from demand growth in gate-all-around transistors, backside power delivery, and high-bandwidth memory. Applied Materials' gross margins hit 49.2% in the second quarter of fiscal 2025, which was the highest since 2000. Moreover, the company expects its advanced DRAM revenues to grow more than 40% in 2025, driven by DDR5 and HBM. Due to all these positive factors, analysts are optimistic about the stock's future growth. The Zacks Consensus Estimate for fiscal 2025 and 2026 revenues is projected to grow 5.96% and 5.7%, respectively. The Zacks Consensus Estimate for 2025 and 2026 earnings is projected to grow 9.2% and 5%, respectively. Applied Materials is on track to sustain its momentum. Additionally, the company has consistently outperformed earnings expectations, delivering an average surprise of 4.94% over the last four quarters, reflecting its strong execution capabilities. AMAT's Valuation Offers Upside Potential Applied Materials is trading at a 12-month forward P/E ratio of 17.09, significantly below the industry average of 25.5. Given its dominance in semiconductor equipment and AI-driven chip manufacturing, this valuation discount suggests strong upside potential over the long term. Applied Materials is also trading at a lower P/E multiple than other semiconductor companies, including Lam Research, KLA Corporation and ASML Holding. Currently, Lam Research, KLA Corporation and ASML Holding have a P/E multiple of 21.25X, 24.1X and 26.2X, respectively. Applied Materials Forward 12 Months (P/E) Valuation Chart Conclusion: Hold AMAT for Now Applied Materials remains a key player in semiconductor manufacturing, with a strong position in AI-driven chip development, advanced packaging and next-generation process technology. For investors, retaining AMAT is the best approach. Currently, Applied Materials carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> 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 KLA Corporation (KLAC): Free Stock Analysis Report ASML Holding N.V. (ASML): Free Stock Analysis Report Lam Research Corporation (LRCX): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis Report
Yahoo
20-05-2025
- Business
- Yahoo
Has KLA (KLAC) Outpaced Other Computer and Technology Stocks This Year?
Investors interested in Computer and Technology stocks should always be looking to find the best-performing companies in the group. KLA (KLAC) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Computer and Technology peers, we might be able to answer that question. KLA is a member of the Computer and Technology sector. This group includes 607 individual stocks and currently holds a Zacks Sector Rank of #9. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group. The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. KLA is currently sporting a Zacks Rank of #2 (Buy). Within the past quarter, the Zacks Consensus Estimate for KLAC's full-year earnings has moved 2.5% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving. According to our latest data, KLAC has moved about 24.9% on a year-to-date basis. At the same time, Computer and Technology stocks have lost an average of 1.4%. As we can see, KLA is performing better than its sector in the calendar year. One other Computer and Technology stock that has outperformed the sector so far this year is Domo (DOMO). The stock is up 23% year-to-date. The consensus estimate for Domo's current year EPS has increased 8.2% over the past three months. The stock currently has a Zacks Rank #2 (Buy). Looking more specifically, KLA belongs to the Electronics - Miscellaneous Products industry, which includes 34 individual stocks and currently sits at #157 in the Zacks Industry Rank. On average, this group has gained an average of 5.7% so far this year, meaning that KLAC is performing better in terms of year-to-date returns. Domo, however, belongs to the Internet - Software industry. Currently, this 167-stock industry is ranked #73. The industry has moved +7% so far this year. Investors with an interest in Computer and Technology stocks should continue to track KLA and Domo. These stocks will be looking to continue their solid performance. 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 KLA Corporation (KLAC) : Free Stock Analysis Report Domo, Inc. (DOMO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
30-04-2025
- Business
- Yahoo
KLA: Fiscal Q3 Earnings Snapshot
MILPITAS, Calif. (AP) — MILPITAS, Calif. (AP) — KLA Corporation (KLAC) on Wednesday reported fiscal third-quarter profit of $1.09 billion. The Milpitas, California-based company said it had profit of $8.16 per share. Earnings, adjusted for one-time gains and costs, came to $8.41 per share. The results beat Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of $8.06 per share. The maker of equipment for manufacturing semiconductors posted revenue of $3.06 billion in the period, also beating Street forecasts. Eight analysts surveyed by Zacks expected $3.01 billion. For the current quarter ending in June, KLA expects its per-share earnings to range from $7.75 to $9.31. The company said it expects revenue in the range of $2.93 billion to $3.23 billion for the fiscal fourth quarter. _____ This story was generated by Automated Insights ( using data from Zacks Investment Research. Access a Zacks stock report on KLAC at Sign in to access your portfolio
Korea Herald
28-04-2025
- General
- Korea Herald
Court approves 'full adoption' of stepdaughter
Stepfather applies for family name change to prevent social prejudice and confusion for his adopted child A recent civil court ruling granted a South Korean man the right to fully adopt his China-born stepdaughter, changing her family name and place of family origin to avoid possible discrimination and confusion on the child's part. The Korea Legal Aid Corp. said Monday that the Cheongju District Court ruled in favor of a plaintiff who sought to give his surname to his stepdaughter. His wife, a North Korean defector, had given birth to the girl with a Chinese man during her time in China before moving to South Korea and marrying the plaintiff. Despite the daughter fully accepting the plaintiff as the father, she reportedly faced confusion after entering elementary school and noticing that she, unlike her classmates, had a different last name from her father. The father requested help from the KLAC, which represented him in the civil case. The court ruled that it is reasonable for the girl to be fully adopted for her emotional stability and well-being. It acknowledged the KLAC's claim that the child is satisfied with her current life, and that the family does not know her biological father's whereabouts or whether he is even alive. 'Full adoption' and how it works Full adoption, as it is known in the law, was incorporated into the Civil Act and came into effect in 2008 under a revision to Articles 908-2 through 908-8. It terminates all family relations and inheritance rights related to an adoptee's biological parent and establishes a complete familial relationship with the adoptive parent. The main change is that an adopted child is granted the same legal status as a biological child. Korea's adoption laws state that an adopted child is to maintain the biological father's family name and place of registration -- referring to the biological family's place of origin -- but these are changed to those of the adopted father upon full adoption. Under Article 781 of the Civil Act, children in Korea take the father's family name and place of registration unless the parents agreed at the time of marriage to have the child take the mother's name and place or when the biological father is unknown. Changes to a surname or place of registration can be granted by a court. To be granted full adoption, a child has to be a legal minor on the date of the court's ruling, and the parents must have been married for at least three years. Full adoption by a single parent had been impossible in the past, but the National Assembly in 2022 revised the law to allow single parents aged at least 25 to fully adopt a child. The biological parent must consent to the full adoption unless their whereabouts are unknown or their parental rights have been terminated by a court ruling. The system of full adoption was implemented to prevent adopted children from facing discrimination in matters of inheritance and broader societal prejudice. Surveys indicate that there remains significant prejudice against those who are adopted. A July 2024 survey by local outlet Hankook Research on 1,000 adults showed that 26 percent of respondents felt some discomfort with the idea of an adoptee marrying their child, with 14 percent saying they are uncomfortable with an adoptee befriending their child. Half of the respondents said they feel neither positively nor negatively toward adoption, with 42 percent saying they have positive feelings toward it. Although less than 10 percent said they personally have bad feelings toward adoption, 37 percent said they think Korean society as a whole does harbor negative feelings toward adoptees and adopted families.
Yahoo
10-04-2025
- Business
- Yahoo
KLA Corporation (KLAC): Buy, Sell, or Hold Post Q4 Earnings?
Over the past six months, KLA Corporation's shares (currently trading at $671.01) have posted a disappointing 15.9% loss while the S&P 500 was down 7.7%. This might have investors contemplating their next move. Given the weaker price action, is now the time to buy KLAC? Find out in our full research report, it's free. Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips. Reviewing a company's long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, KLA Corporation grew its sales at an excellent 15.5% compounded annual growth rate. Its growth beat the average semiconductor company and shows its offerings resonate with customers. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions (which can sometimes offer opportune times to buy). Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals. KLA Corporation has been a well-oiled machine over the last two years. It demonstrated elite profitability for a semiconductor business, boasting an average operating margin of 34.9%. This result isn't surprising as its high gross margin gives it a favorable starting point. If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. KLA Corporation has shown terrific cash profitability, and if sustainable, puts it in an advantageous position to invest in new products, return capital to investors, and consolidate the market during industry downturns. The company's free cash flow margin was among the best in the semiconductor sector, averaging an eye-popping 31.8% over the last two years. These are just a few reasons KLA Corporation is a rock-solid business worth owning. With the recent decline, the stock trades at 23.4× forward price-to-earnings (or $671.01 per share). Is now a good time to initiate a position? See for yourself in our comprehensive research report, it's free. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
