Applied Materials tops Q1 earnings estimates

Yahoo Finance Live anchors Julie Hyman, Brian Sozzi, and Brad Smith discuss the rise in stock for Applied Materials following first-quarter earnings.

Video transcript

[AUDIO LOGO]

JULIE HYMAN: Let's talk about one stock and in technology, incidentally, that's doing well this morning. That's Applied Materials, beating estimates on the top and bottom line while also providing a better than expected forecast for second-quarter sales. But its display and adjacent market segment did see a year-over-year decline in net sales. The shares are actually not doing that much. Why do we care about Applied Materials? First of all, let's take a step back--

BRIAN SOZZI: Yeah, why? [LAUGHS]

JULIE HYMAN: It's the biggest chip equipment maker, right? So when we talk about all these semiconductor makers, how do they make the semiconductors? They buy equipment from A Mat, right? And then they make it with that, and some other companies like KLA-Tencor, for example. So that's-- this is another barometer on semiconductor demand, right? And these guys are still selling their equipment. Although we did mention that one weak spot within the unit for the company.

BRAD SMITH: Yeah, there were two major things that I took away from the call on Applied Materials here. They did, to your point on the demand front, they said that they're making good progress on closing their supply versus demand gap. But they did see recently one of their major suppliers encountered disruption impacting their second-quarter shipments there. So keep a close eye on that.

Also, the near-term perspective on the market, they provided a little bit of some of those headwinds that still continue to persist. Their customers facing demand dynamics, consumer-driven markets. PC smartphones clearly weaker, the company is saying, while inflection-driven markets remain a little bit more resilient right there. And of course, if you were wondering, there was plenty of AI mentions or at least one that I printed off.

BRIAN SOZZI: Of course, because what would an earnings call be without AI mentions right now, especially in tech? I'll just add this, this is a good week for old, boring tech. Cisco's exciting. But they had a very good quarter yesterday. I like what CFO Scott Herring told us about for demand for his business. Good quarter out of here by Applied Materials. Citi noting strength in their power solutions business, analog, sensors. So nothing sexy on the surface, just good, old fashioned execution.

BRAD SMITH: Yeah, it's only gonna be a matter of time before JM Smucker starts talking about AI in their earnings reports as well here.