Applied Materials, Inc. (AMAT) exceeded expectations for its third quarter, reporting strong revenue and earnings growth. The company posted revenue of $6.78 billion for the quarter, surpassing the consensus estimate of $6.673 billion. Adjusted earnings per share also beat analysts’ forecasts, coming in at $2.12 compared to the expected $2.02.
This positive performance was attributed to the growing demand for chip equipment, fueled by the race for artificial intelligence (AI) leadership. “Applied Materials is delivering strong results in 2024 with record revenues in our fiscal third quarter and earnings towards the high end of our guided range,” said Gary Dickerson, president and CEO of Applied Materials. “The race for AI leadership is fueling demand for our unique and connected portfolio of products and services, positioning Applied to outperform our markets over the longer term.”
Looking ahead, Applied Materials anticipates revenue of $6.53 billion, plus or minus $400 million, for the fourth quarter, slightly lower than the estimated $6.91 billion. The company projects adjusted earnings to be between $2 and $2.36 per share, exceeding the anticipated $2.14 per share.
The strong earnings report led to a 5.1% increase in Applied Materials shares, closing at $211.83 on Thursday. Several analysts adjusted their price targets for AMAT stock following the announcement. Morgan Stanley analyst Joseph Moore maintained an Equal-Weight rating but raised his price target from $223 to $224. JP Morgan analyst Harlan Sur maintained an Overweight rating and increased his price target from $240 to $250. Needham analyst Charles Shi reiterated a Buy rating and kept his price target at $260.
Overall, the positive results and optimistic outlook from Applied Materials suggest a strong future for the company, driven by the growing demand for AI technology. Analysts remain bullish on the stock, with several raising their price targets, indicating a potential for further growth in the coming quarters.
