Applied Materials Inc, the largest US supplier of semiconductor equipment, on Thursday gave sales and profit forecasts that far exceeded analysts’ estimates, fueled by soaring demand for artificial intelligence (AI) computing and memory chips.
Revenue would be approximately US$8.95 billion in the fiscal third quarter, which runs through July, Applied Materials said in a statement.
Analysts had estimated US$8.15 billion on average.
Photo: Reuters
Earnings are expected to be about US$3.36 per share, excluding some items, compared with a projection of US$2.88.
Applied Materials customers such as Samsung Electronics Co and Micron Technology Inc are expanding manufacturing to cope with short supplies of memory chips.
A dramatic boom in the market for data centers and gear to run AI tasks also is pushing demand for semiconductors to new levels.
The AI growth would contribute to a sales increase of more than 30 percent in the company’s semiconductor equipment business this calendar year, Applied Materials chief executive officer Gary Dickerson said in an interview.
It is also helping boost gross margins, which are at the widest level in more than 25 years, Dickerson said.
“This AI compute demand is going to be a multiyear driver,” he said. “Our customers are giving us eight-quarter forecasts, so we have more longer-term visibility than any time I’ve been in this industry.”
The shares climbed about 2 percent in late trading on Thursday after the results were released. They had been up 71 percent this year through the close, in line with the benchmark Philadelphia Stock Exchange Semiconductor Index.
Sales in the second quarter rose 11 percent to US$7.91 billion, while earnings, excluding certain items, climbed to US$2.86 per share.
Analysts had projected revenue of $7.67 billion and profit of US$2.68 per share.
Applied Materials had already been investing to expand its production, aiming to meet a run-up in demand.
The company has “basically doubled” its manufacturing capacity, Dickerson said.
The company would use visibility into orders to ensure it has enough supplies for its products and to train service engineers, he said.
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