Washington (Business Emerge), August 17: Applied Materials anticipates a slight uptick in fourth-quarter revenue, projecting approximately $6.93 billion, plus or minus $400 million, as the demand for AI-driven chip-making equipment continues to rise. This forecast narrowly surpasses Wall Street’s average estimate of $6.92 billion, according to LSEG data. The company also predicted an adjusted profit per share ranging between $2.00 and $2.36, compared to analysts’ expectations of $2.14 per share.
However, despite the promising forecast, shares of the Santa Clara-based company dipped by 2.8% in extended trading, even after closing nearly 5% higher earlier in the day. The drop in share value has been attributed to a combination of factors, including a mixed sales report from China and wide variations in the company’s fourth-quarter projections.
“The significant rise in the stock earlier today likely contributed to the pullback seen in after-hours trading,” noted Michael Ashley Schulman, Chief Investment Officer at Running Point Capital. He added that some analysts may have anticipated a stronger forecast for the upcoming quarter.
Applied Materials, the largest U.S. semiconductor equipment maker, has been experiencing increased demand for advanced wafer fabrication equipment. This surge is driven by the booming need for AI-powered chips, which are essential for high-performance computing and data centers. Additionally, the demand for memory semiconductors like dynamic random access memory (DRAM) has also seen a notable increase, further bolstering the company’s outlook.