Applied Materials AMAT-Q forecast second-quarter revenue and profit above market estimates on Thursday, betting on a boom in demand for AI processors and a worldwide memory shortage to help drive sales of its chipmaking equipment.
The company’s shares rose over 9 per cent in extended trading. Shares of peers Lam Research and KLA both rose more than 2 per cent in extended trading, as Applied’s upbeat outlook lifted sentiment.
Applied Materials expects second-quarter sales of about US$7.65-billion, plus or minus US$500-million, compared with estimates of US$7.01-billion, according to data compiled by LSEG.
The largest U.S. semiconductor equipment maker forecast second-quarter adjusted profit of about US$2.64 per share, plus or minus 20 US cents, compared with estimates of US$2.28.
The results were “fueled by the acceleration of industry investments in AI computing,” CEO Gary Dickerson said in a statement.
“The need for higher performance and more energy-efficient chips is driving high growth rates for leading-edge logic, high-bandwidth memory and advanced packaging.”
High-bandwidth memory refers to a type of advanced memory chip used alongside pricey AI processors such as those sold by Nvidia.
The rapid buildout of AI infrastructure has absorbed much of the world’s memory chip supply, which has lifted prices as manufacturers prioritize components for already short-supplied HBM.
Applied Materials reported first-quarter revenue of US$7.01-billion, beating estimates of US$6.87-billion.
Within its chip segment, revenue from tools for dynamic random access memory chips rose 34 per cent, compared with 27 per cent in the first quarter last year.
The company reported first-quarter profit of US$2.38 per share, excluding items. Analysts had expected an adjusted profit of US$2.20 per share.