Applied Materials sees Q1 revenue ahead of expectations after sales beat on AI demand
Overview
Semiconductor equipment maker's Q4 revenue rose 53% yr/yr, beating analyst expectations
Adjusted EPS for Q4 rose 92% yr/yr and beat analyst expectations
Company executed $2 bln in share repurchases, largest quarterly buyback in over eight years
Outlook
AMAT forecasts quarterly revenue of around $11.10 bln, plus or minus $500 mln, compared with the average estimates of $10.89 bln
Company sees Q1 FY2027 non-GAAP diluted EPS at $4.35, plus or minus $0.20
AMAT says AI demand is fueling incremental semiconductor growth
Result Drivers
AI DEMAND - Co said AI continues to drive strong incremental demand for semiconductors, supporting revenue growth
TECHNOLOGY LEADERSHIP - Management cited leadership in wafer fab equipment as a factor in higher revenue and margins
SEMICONDUCTOR SYSTEMS GROWTH - Revenue in the Semiconductor Systems segment rose, with higher contributions from foundry, logic, DRAM, and flash memory
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q4 Sales | Beat | $10.41 bln | $10.30 bln (23 Analysts) |
Q4 Adjusted EPS | Beat | $4.16 | $4.05 (25 Analysts) |
Q4 EPS | $3.40 | ||
Q4 Adjusted Net Income | Beat | $3.32 bln | $3.24 bln (21 Analysts) |
Q4 Net Income | $2.72 bln | ||
Q4 Adjusted Free Cash Flow | $2.62 bln | ||
Q4 Adjusted Gross Margin | 50.60% | ||
Q4 Adjusted Operating Margin | 35.30% |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 35 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the semiconductor equipment & testing peer group is "buy"
Wall Street's median 12-month price target for Applied Materials Inc is $610.00, about 54.4% above its November 11 closing price of $395.08
The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 32 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)