Applied Materials Earnings Preview: Beat Likely Amid New Trade Secret Litigation?

Applied Materials (NASDAQ:AMAT), a leader in semiconductor equipment, reported Q2 FY2025 non‑GAAP EPS of $2.39 that beat estimates, while revenue of $7.1B slightly missed. With strong margins, 21 years of dividends, aggressive buybacks, and leadership in GAA and advanced packaging, it is well-positioned for growth.

Key highlights

• Ahead of Thursday’s fiscal third-quarter results, Stifel reiterated its Buy rating and $195 price target on Applied Materials, the $152.5 billion semiconductor-equipment giant that “InvestingPro” rates with a "GOOD" financial health score.
• The firm expects Applied Materials to meet or slightly beat July-quarter revenue and EPS, guide fiscal Q4 (Oct) flat to up sequentially, and reports a 48.1% gross margin with 5.99% revenue growth over the past 12 months.
• Applied Materials is well-placed to benefit from AI-driven demand for specialized chips, leveraging its expertise in advanced nodes like Gate-All-Around (GAA) technology as a key enabler for AI chip manufacturing.
• AMAT expertise in High Bandwidth Memory (HBM) and advanced DRAM aligns with rising demand for high-performance memory in AI, with strong potential to gain market share in GAA, advanced packaging, backside power, and HBM technologies.

The ongoing geopolitical tensions and trade restrictions with China threaten Applied Materials’ revenue, with Chinese sales expected to decline about 17% in 2025. The cyclical semiconductor industry also exposes the company to downturns, potentially reducing customer capital expenditures and exerting pricing pressure.

AMAT Q3 2025 earnings after market Thursday August 14, 2025

Technical Analysis Perspective

• AMAT repeatedly rejected the 200-201 level in January 2025 and again in July, confirming its significance.
• Prices rebounded from 159 in December 2024 but failed to break 200 on the first attempt.
• A deeper decline to 124 occurred in March 2024, with subsequent failed attempts to clear 200 again.
• The double rejection of the 200 zone suggests a potential bullish inverse head & shoulders pattern in the making.
• The recent low of 174.50 could mark the right shoulder; a strong move above 200-201 could target 214–215, with further upside after a correction.
• If this pattern plays out, a significant rally may be ahead in the coming months.
• However, continued rejection at 200-201 and a break below 174.50 after earnings would negate the bullish outlook and suggest a lower move.

Weekly Candlestick Chart

AMAT Seasonality Chart

Since 2006, Applied Materials has averaged a 1.3% decline in August, occurring in 40% of years, and a 1.5% drop in September, happening in 42% of years—both below the 50% threshold.

***

Be sure to check out all the market-beating features InvestingPro offers.

InvestingPro members can unlock a powerful suite of tools designed to support smarter, faster investing decisions, like the following:

ProPicks AI

Built on 25+ years of financial data, ProPicks AI uses a machine-learning model to spot high-potential stocks using every industry-recognized metric known to the big funds and professional investors. Updated monthly, each pick includes a clear rationale.

Fair Value Score

The InvestingPro Fair Value model gives you a clear, data-backed answer. By combining insights from up to 15 industry-recognized valuation models, it delivers a professional-grade estimate of what any stock is truly worth.

WarrenAI

WarrenAI is our generative AI trained specifically for the financial markets. As a Pro user, you get 500 prompts each month. Free users get 10 prompts.

Financial Health Score

The Financial Health Score is a single, data-driven number that reflects a company’s overall financial strength.

Market’s Top Stock Screener

The advanced stock screener features 167 customized metrics to find precisely what you’re looking for, plus pre-defined screens like Dividend Champions and Blue-Chip Bargains.

Each of these tools is designed to save you time and improve your investing edge.

Not a Pro member yet? Check out our plans here or by clicking on the banner below. InvestingPro is currently available at up to 50% off amid the limited-time summer sale.

He is the founder of TwT Learnings, provides financial market training.

https://twtlearning.com/ (Checkout Testimonials)

https://x.com/twtlearning

https://www.youtube.com/@twtlearning

Email us: admin@twtlearning.com

https://www.investing.com/members/contributors/263388641/opinion