(Reuters) – Applied Materials Inc. in pre-market trading on Friday after the semiconductor equipment supplier said it expects a better-than-expected second quarter on strong demand from customers looking to make AI-enabled chips. ‘s stock price rose 13%.
The outlook is also supported by improvements in certain electronics end markets such as smartphones and personal computers, and analysts highlighted the company’s diversified portfolio that could enable further gains.
“Applied is well-positioned to benefit from several upcoming technology changes that will outperform WFE (wafer fabrication equipment) over the next few years,” JPMorgan analysts said.
Applied expects second-quarter sales of $6.5 billion plus or minus $400 million and adjusted earnings per share of $1.79 to $2.15 for the quarter ending April, beating market expectations.
Sales forecasts for the first quarter were also exceeded.
The company’s stock is trading at $212 and is on track to hit a new all-time high on Friday if the pre-market rally continues. As of Thursday’s close, the stock is up nearly 16% since the beginning of the year.
“Management noted a recovery in utilization across our leading-edge logic and memory customers, which increased confidence in our ‘V’-shaped recovery,” Jefferies analysts said. Ta.
Applied Materials, which supplies companies such as Intel and Samsung, expects high-bandwidth memory (HBM) packaging revenue to quadruple from last year.
HBM packaging uses a special stacked arrangement of memory chips to improve performance, making it suitable for high-performance computing.
At least four analysts upgraded their ratings and eight raised their price targets, according to LSEG data.
The company’s stock is currently valued at 22.77 times one-year forward earnings, compared to the industry average of 25.17 times.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Sriraj Kaluvila)
