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Santa Clara, California-based Applied Materials, Inc. (AMAT) is a provider of manufacturing equipment, services, and software to the semiconductor, display, and related industries. With a market cap of $170.2 billion, Applied Materials operates through Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets segments. It is expected to announce its Q3 earnings after the market closes on Thursday, August 15.
Ahead of the event, analysts expect Applied Materials to report a profit of $2.01 per share, up 5.8% from $1.90 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates over the past four quarters. Its EPS for the last reported quarter grew 4.5% to $2.09, exceeding the consensus estimates by 6.1%.
Looking ahead to fiscal 2024, analysts expect Applied Materials to report an EPS of $8.31, up 3.2% from $8.05 in fiscal 2023. Over the longer term, its fiscal 2025 EPS is expected to grow 13.1% year over year to $9.40.
AMAT stock has rallied 26.8% on a YTD basis, outperforming the S&P 500 Index’s ($SPX) 14.5% gains and the S&P 500 Technology Sector SPDR’s (XLK) 11.9% returns over the same time frame.
Applied Materials has been riding high this year, thanks to stellar financials, upbeat guidance, and smart bets on growth areas like artificial intelligence (AI) and the internet of things (IoT). Its knack for capturing market share has been paying off, and it has kept shareholders happy with steady dividends and buybacks.
The stock got a boost on June 5 when Barclays upgraded it, highlighting a surge in semiconductor equipment orders from China and expected U.S. investments. Despite beating Q2 earnings expectations on May 16, the stock dipped when the Q3 forecast didn't quite hit the targets investors hoped for, hinting at a cautious outlook.
The consensus opinion on Applied Material stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 32 analysts covering the stock, 19 recommend a “Strong Buy,” two suggest a “Moderate Buy,” and 11 advise a “Hold” rating.
The average target price for Applied Material is $239.72, indicating a potential upside of 16.6% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
