Applied Materials Plunges 6.01% on Mixed Q2 Results, Revenue Up 7%

Applied Materials drop 6.01% in pre-market on May 16, 2025, as the company released its Q2 financial report, revealing a 6.84% year-over-year increase in revenue to $14.27 billion for the first half of the fiscal year, while net income decreased by 11.20% to $3.32 billion. The company's earnings per share for the fiscal year stood at $4.10, down from $4.50 the previous year.

Applied Materials, a leading provider of materials engineering solutions for the semiconductor, display, and related industries, reported a 7% year-over-year increase in revenue for the second quarter, reaching $7.1 billion. However, this figure fell short of analysts' expectations of $7.13 billion. The company's adjusted earnings per share of $2.39 exceeded the consensus estimate of $2.31. The semiconductor systems segment, a key revenue driver, contributed $5.26 billion, slightly below the anticipated $5.32 billion. The company attributed the shortfall to reduced investment in the ICAPS market, partially offset by significant investments in advanced process chips.

Looking ahead, Applied Materials forecasts third-quarter revenue to be around $7.2 billion, with earnings per share estimated at $2.35. This outlook aligns with market expectations but falls short of some analysts' higher projections. The company faces challenges due to U.S. export restrictions on China, which has led to a decline in revenue from the region. The company's CEO, Gary Dickerson, acknowledged the market uncertainties but emphasized the company's operational resilience. Despite these challenges, the demand for high-end chip manufacturing equipment remains robust, driven by the AI computing boom and the increasing complexity of chip fabrication processes. As a key supplier to major chip manufacturers like TSMC, Samsung, and Intel, Applied Materials' performance is closely watched as an indicator of industry health.