Applied Materials earnings reveal AI chip demand

Shares of Applied Materials (AMAT) are largely flat on Friday morning after the company posted its second quarter earnings on Thursday, revealing revenue of $6.65 billion. The stock has gained over 32% year to date, highlighting the demand for AI chips.

Yahoo Finance Anchors Madison Mills and Seana Smith break down the latest development for Applied Materials and how it may operate moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Nicholas Jacobino

Video transcript

Let's take a look at applied materials.

Aim at the country's largest semiconductor equipment maker.

Shares are essentially flat this morning, but we're bringing this up because we're getting data out the latest earnings report here and pointing to some larger trends that we wanna highlight and what this exactly tells us about the chip industry.

So when it comes to what these expectations were, investors were looking at aim at for signs of whether or not this chip recovery is well underway.

Remember that this is a stock, if you actually take a look at a longer term chart of applied materials, this is a stock that is actually risen about 30% this year.

So these results failing to really live up to those expectations or give investors a reason to buy at these elevated levels.

But it does give us a good sense of demand in some crucial parts of of the electronic supply chain here.

So again, the forecast a bit tepid here, at least that's the view of some of them, some investors and analysts at this point.

Matt.

Yeah, it's interesting seeing some of the commentary that we're already getting in after this update.

From a A as well.

Morgan Stanley's analyst, Joseph Moore saying he reiterated his equal weight rating saying that the forecast is conservative around China spending next year.

Again, China spending continuing to come up across a lot of these prints.

He said that they're impressed by their execution, but they don't see an immediate an imminent negative catalyst with the China spending but still something to watch because it was a little bit conservative.

There.

Again, those sales in the third quarter could remain flat, essentially given what we already know from them.

And it just continues to be another name that is impacted by China spending on chips in particular.

But interesting to see whether or not that is going to be able to normalize a little bit, particularly as the situation in China potentially normalizes after that government intervention there.