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Valued at a market cap of $156.3 billion, Applied Materials, Inc. (AMAT) provides innovative manufacturing equipment, services, and software to the semiconductor, display, and related industries, enabling improvements in device performance, yield, and cost. With a global presence and expertise in advanced technologies, it supports manufacturers in producing cutting-edge semiconductor chips, displays, and electronic components. The Santa Clara, California-based company is slated to announce its fiscal Q1 2025 earnings results on Thursday, Feb. 20.
Ahead of this event, analysts expect the semiconductor equipment maker to report a profit of $2.28 per share, a 7% growth from $2.13 per share in the year-ago quarter. The company has exceeded Wall Street's earnings expectations in the past four quarters. In the most recent quarter, AMAT surpassed the consensus EPS estimate by a 6.4% margin.
For fiscal 2025, analysts expect AMAT to report EPS of $9.37, marking a growth of 8.3% from $8.65 in fiscal 2024. In addition, EPS is expected to grow 8.4% year-over-year to $10.16 in fiscal 2026.
Shares of Applied Materials have risen 25.2% over the past 52 weeks, slightly lagging behind the broader S&P 500 Index's ($SPX) 26.5% gain. But, the stock has outpaced the Technology Select Sector SPDR Fund's (XLK) 22.1% return over the same period.
Despite reporting stronger-than-expected Q4 2024 adjusted EPS of $2.32 and revenue of $7.1 billion on Nov. 14, Applied Materials' stock dropped 9.2% the next day due to disappointing Q1 2025 guidance. The company cited headwinds from the tech cold war with China, as it scales back operations in compliance with regulations restricting advanced semiconductor technology, impacting its revenue outlook. Guidance for Q1 revenue of $7.1 billion to $7.2 billion fell short of consensus estimates, with a 28% projected drop in display revenue. Although adjusted EPS guidance of $2.11 - $2.47 slightly exceeded expectations, concerns about revenue growth drove the sell-off.
Analysts' consensus view on AMAT stock remains cautiously optimistic, with a "Moderate Buy" rating overall. Out of 33 analysts covering the stock, 20 recommend a "Strong Buy," two "Moderate Buys," 10 give a "Hold" rating, and one suggests a "Strong Sell." The average analyst price target for AMAT is $211.50, suggesting a potential upside of 10.1% from the current levels.
