Applied Materials Reports Strong Q3 Results Driven by AI Race

Key Takeaways

• Applied Materials posted stronger-than-expected results for the fiscal third quarter and provided an outlook in line with projections.
• Quarterly revenue reached a record high and profit topped analysts’ estimates.
• Applied Materials CEO Gary Dickerson said the record revenue was fueled by the race for artificial intelligence leadership.

Applied Materials (AMAT) reported stronger-than-expected results for the fiscal third quarter, amid a surge in demand that the company’s CEO said was fueled by the race for artificial intelligence (AI) leadership.

The semiconductor equipment maker reported quarterly revenue reached a record high at $6.78 billion, representing 5% growth from the year-ago period and topping analysts’ estimates. Net income was $1.7 billion or $2.05 per share, gaining from the year prior and also ahead of projections.

AI Race Drives Record-High Revenue

“The race for AI leadership is fueling demand for our unique and connected portfolio of products and services, positioning Applied to outperform our markets over the longer term,” Applied Materials CEO Gary Dickerson said.

The company said it anticipates revenue in the final quarter of the fiscal year of roughly $6.93 billion, and diluted earnings per share (EPS) of $2 to $2.36, consistent with analysts’ expectations.

China sales also accounted for a smaller portion of the company’s total revenue than projected, which could suggest sales to the region are normalizing faster than analysts anticipated.

Applied Materials shares wavered between slight gains and losses in extended trading Thursday following the release. The stock has gained over 30% since the start of the year through Thursday’s close.

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Conclusion

Applied Materials has reported stronger-than-expected results for the fiscal third quarter, driven by the race for artificial intelligence (AI) leadership. The company’s quarterly revenue reached a record high, surpassing analysts’ estimates, and net income also exceeded projections. Applied Materials CEO Gary Dickerson attributed the record revenue to the increasing demand for their unique and connected portfolio of products and services in the AI industry. The company’s outlook for the final quarter of the fiscal year remains positive, with revenue expected to be around $6.93 billion and diluted earnings per share (EPS) in line with analysts’ expectations. Additionally, the smaller-than-expected contribution from China sales suggests that sales to the region are normalizing faster than anticipated. Despite some volatility in extended trading, Applied Materials’ stock has shown significant gains throughout the year. With the continued growth of the AI industry, Applied Materials is well-positioned to outperform its markets in the long term.