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Applied Materials (AMAT.US) reported record Q3 revenue, in line with Q4 revenue guidance

AInvestThursday, Aug 15, 2024 8:00 pm ET
1min read

Intelligent Finance learned that Applied Materials (AMAT.US), the largest chip equipment manufacturer in the US, reported its Q3 performance. Q3 revenue grew 5.4% YoY to $6.78bn, beating expectations of $6.68bn. Adjusted EPS was $2.12, beating expectations of $2.03.

However, the company disappointed investors who had been hoping for more AI-driven upside by only meeting expectations on Q4 revenue guidance. The company expects Q4 revenue to be around $6.93bn, in line with consensus. Adjusted EPS is expected to be around $2.18, in line with consensus.

Shares of Applied Materials fell more than 2% after hours, indicating some investors had been hoping for more of a blowout quarter. As a major supplier to TSMC, Samsung Electronics and Intel, Applied Materials has benefited from the manufacturing buzz around AI chips. Shares of Applied Materials closed at $211.83 on Thursday, up 31% in the year.

Total revenue for the Semiconductor Systems segment was $4.924bn, up 5.3% YoY. CEO Gary Dickerson said in an interview that demand for equipment used to make advanced processors (the devices needed to develop and run AI software) remains strong. He said customers are winning on the market and investing heavily in new technologies. He said: “I am confident that AI data centers will drive significant wafer demand. It’s a race for all these companies. Whoever gets there first wins, and everyone else is left behind.”

Some of the company’s businesses have been more volatile. That includes Applied Materials’ “ICAP” product line — chip equipment for the internet of things, communications and automotive industries. Orders from automotive manufacturers have fallen at companies like Nvidia (NXPI.US), but Dickerson said the long-term demand for ICAP-type chips would remain strong.

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