Summary:
- Applied materials forecast second-quarter revenue of about $7.65 billion, beating analyst estimates.
- CEO Gary Dickerson attributed the growth to accelerated investments in AI computing boost demand for advanced chips.
- Rising AI-related demand tightens chip supply chains and increases spending on technology wafer manufacturing equipment.
Feb 13 (Reuters) – Shares of Applied Materials jumped 11% on Friday after the chip manufacturing equipment company forecasts better-than-expected quarterly results, driven by surging AI spending and tightening memory market.
If gains continue, the Santa Clara, Calif.-based company is on track to add more than $33 billion to its $260.65 billion market valuation.
Largest in the United States semiconductor equipment The manufacturer is well positioned to capitalize on Demand for AI chipsthat is consuming the world’s memory reserves and pushing chipmakers to increase capacity, a trend that analysts say could support multi-year growth.
Gary Dickerson, CEO of Applied Materials, said the outlook was “fueled by accelerating industry investment in AI computing,” adding that AI workloads were driving demand for higher-performance, more power-efficient chips.
The company expects second-quarter revenue of about $7.65 billion, plus or minus $500 million, above the average analyst estimate of $7.01 billion, according to LSEG data.
It forecast adjusted earnings of $2.64 per share, plus or minus 20 cents, compared with an estimate of $2.28.
The increase comes as the expansion of AI data centers from hyperscalers and growing demand for high-bandwidth memory tighten chip supply chains and drive new spending on wafer fabrication and packaging equipment.
In December, industry group SEMI forecast that sales of equipment used to make computer chip wafers would rise about 9% to $126 billion in 2026 and another 7.3% to $135 billion in 2027.
“We expect a massive growth cycle in wafer manufacturing equipment over the next three years,” said William Kerwin, senior equity analyst at Morningstar.
“The demand for artificial intelligence infrastructure is immense and the supply is scarce. »
Applied Materials’ forecasts boosted other chip equipment stocks. Outlook Pushed Stocks of U.S. Peers Search Lam up 2.7%, while UCK gained more than 1%.
At least 22 brokerages raised their price target on Applied Materials following the results.
(Reporting by Rashika Singh and Harshita Mary Varghese in Bangalore; Editing by Tasim Zahid)
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