Technology

The following is a summary of the Applied Materials, Inc. (NASDAQ:AMAT) Q2 2024 Earnings Call Transcript: Financial Performance: Applied Materials reported Q2 net sales of nearly $6.65 billion, a slight increase from previous quarters. AGS revenue grew 7% year over year to $1.53 billion. The company returned approximately $1.1 billion to shareholders, including $266 million in dividends and $820 million in buybacks. Non-GAAP gross margin increased by 70 basis points to 47.5%, while non-GAAP EPS grew by 4.5% to $2.09. For Q3, Applied Materials forecasts a revenue of $6.65 billion, plus or minus $400 million, and non-GAAP EPS of $2.01, plus or minus $0.18. Business Progress: Revenues from the advanced packaging product portfolio is expected to grow to about $1.7 billion this year and possibly double in future. Applied Materials is targeting to generate more than $2.5 billion in revenue from gate-all-around nodes this year and expects this to potentially […]

We raise our price target by $7 to $240, 25x our CY 25 EPS view ($9.61), near peers and above AMAT’s 3-year average (~16x) on rising AI momentum and improving conditions across multiple end markets. We raise our FY 24 (Oct.) EPS view by $0.07 to $8.45, raise FY 25’s by $0.19 to $9.41, and initiate a FY 26 view at $10.58. AMAT posts Apr-Q sales of $6.65B (flat Y/Y) and EPS of $2.09 (+5%), near consensus, while raising its ’24 advanced packaging sales projection by $0.2B to $1.7B on stronger HBM packaging growth and providing a bullish forecast for GAA-related equipment sales (~$2.5B of incremental sales expected in CY 25) as customers ramp 2-nm node activity. We see tailwinds from rising AI demand fueling further growth across both logic and memory, and we are encouraged by positive commentary on ICAPS strength considering global weakness in the auto / industrial

Applied Materials (AMAT) faces the prospect of softer China demand and “strong offsetting tailwinds” in logic chips and advanced semiconductor packaging after fiscal Q2 results topped consensus, Morgan Stanley said Friday in a note. “At the risk of sounding like a broken record, we do believe the company that China will trend back toward the more traditional 30% of revenue from the current 43%,” the note said. “We remain on the cautious side of that; a region that is less than 5% of the global manufacturing footprint in foundry and memory driving over 40% of equipment sales and driving growth in trailing edge ICAP revenues higher during the worst analog inventory correction in 30 years, has unsustainable elements that make us cautious,” Morgan Stanley said. Still, “several trends are likely to prove strong offsetting tailwinds as the company has positioned themselves well in advanced logic and advanced packaging,” the note

Applied Materials posted slightly higher revenue in the fiscal second quarter and forecast another rise on the top line in the current period, a positive sign for a recently down semiconductor market. The Santa Clara, Calif.-based semiconductor equipment company reported a profit of $1.72 billion, or $2.06 a share, in the quarter that ended April 28, compared with a profit of $1.58 billion, or $1.86 a share, a year earlier. Analysts polled by FactSet expected a per-share profit of $2. Stripping out certain one-time items, the company posted an adjusted profit of $2.09 a share, greater than the $1.99 expected by analysts surveyed by FactSet. Revenue rose from a year earlier to $6.65 billion, beating the $6.54 billion expected by analysts polled by FactSet, which would have represented a slight drop from a year earlier. A year-on-year drop in revenue from its semiconductor systems segment was offset by higher revenue