Nucor earnings beat by $0.08, revenue fell short of estimates
On Monday, Cantor Fitzgerald reiterated its Overweight rating on Applied Materials (NASDAQ:AMAT) with a steady price target of $220.00, above the current analyst consensus high target of $250. The firm anticipates Applied Materials to slightly outperform expectations and increase its guidance, propelled by industry trends that have also benefited peers such as ASML (AS:ASML), KLAC, and LRCX. These trends include the robust performance of TSMC, SK Hynix’s High Bandwidth (NASDAQ:BAND) Memory (HBM) development, a better-than-expected performance in domestic China, and Samsung (KS:005930)’s NAND business growth.
Applied Materials, which provides manufacturing equipment, services, and software to the semiconductor industry, is expected to follow the positive earnings trajectory of its sector counterparts. With a market capitalization of $146.29 billion and annual revenue of $27.18 billion, the company has established itself as a prominent player in the semiconductor equipment industry. The company’s upcoming financial report, due in just 3 days, is likely to reflect higher consensus estimates, according to Cantor Fitzgerald’s analysis. InvestingPro analysis indicates the company is currently trading near its Fair Value.
The research firm also pointed out that Applied Materials has not performed as well as some of its peers, namely LRCX and KLAC, on a year-to-date basis, though it has achieved a 10.68% return year-to-date. According to InvestingPro data, the company has maintained dividend payments for 21 consecutive years and recently increased its dividend by 25%, demonstrating strong financial stability. Cantor Fitzgerald predicts a potential rebound for Applied Materials shares, given investors may have been overly pessimistic about companies connected to the lagging-edge technology and domestic China markets.
Applied Materials has been navigating a complex global semiconductor market, where demand for advanced chips and memory solutions continues to grow. The company’s position in the market is considered crucial as technology firms worldwide rely on its equipment and services to manufacture the latest semiconductor devices.
The stock’s performance in the coming days may reflect investor reactions to Cantor Fitzgerald’s reaffirmed confidence and the expected positive financial report. Applied Materials’ continued growth and strategic positioning in the semiconductor industry are likely to remain focal points for investors monitoring the stock.
In other recent news, semiconductor equipment manufacturers ASML, Lam Research (NASDAQ:LRCX), Applied Materials, and KLA Corporation have been in the spotlight following a series of significant developments. ASML reported robust fourth-quarter results for 2024, surpassing expectations with record net sales of €9.3 billion and a net income of €2.7 billion. This impressive performance has positively influenced the semiconductor equipment sector, as reflected in the pre-market movements of Lam Research, Applied Materials, and KLA Corporation.
Meanwhile, Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, announced a capital expenditure target for the year that surpassed analysts’ expectations, leading to significant gains in stocks of the aforementioned companies. This strategic investment underscores the growing importance of advanced packaging technologies in the semiconductor sector, indicating strong growth prospects in this area.
On a different note, Deutsche Bank (ETR:DBKGn) adjusted its outlook on Applied Materials and KLA Corporation, citing a volatile wafer fabrication equipment market dynamic anticipated for 2025. The bank maintained a Hold rating on Applied Materials and a Buy rating on KLA Corporation, expressing the need for greater clarity on the timing and magnitude of a broader cyclical recovery in the sector.
Lastly, Morgan Stanley (NYSE:MS) downgraded Applied Materials’ stock rating from Equalweight to Underweight due to concerns over the near-term operating environment for the company’s key end-markets. Despite this, the firm’s analysis suggests that Applied Materials is unlikely to outperform within the U.S. Semiconductor Equipment & Materials industry given its market exposure. These are recent developments that investors in the semiconductor equipment sector should take into account.
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