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Applied Materials Sees Strong China Sales, Advanced Technology Driving Analyst Optimism

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Shares of Applied Materials, Inc. (NASDAQ:AMAT) were highly volatile in early trading on Friday, after the company reported better-than-expected results for its fiscal second quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

Goldman Sachs On Applied Materials

Analyst Toshiya Hari maintained a Buy rating, while raising the price target from $220 to $240.

Applied Materials reported its fiscal second quarter revenue of $6.65 billion about 2% higher than consensus and non-GAAP earnings of $2.09 per share 3% above expectations, Hari said in a note.

Although the results and guidance for the current quarter were only marginally higher than expected, “we expect the improved outlook in leading-edge Logic/Foundry (i.e. Gate-All-Around) and DRAM (i.e. HBM) to drive considerable positive revisions to FY2024-26 consensus EPS,” the analyst wrote. “We continue to view the company as a long-term share gainer within the context of the overall Wafer Fab Equipment market,” he added.

Mizuho Securities On Applied Materials

Analyst Vijay Rakesh reiterated a Buy rating, while lifting the price target from $225 to $245.

Applied Materials reported its quarterly revenues and earnings higher than expected, with the gross margin of 47.5% coming in slightly better than consensus of 47.3%, Rakesh said. While DRAM and NAND revenue declined by 6% and 25% sequentially, Foundry/Logic revenue grew by 5%, he added.

“China up ~102% y/y (43% of total revs vs ~25-30% historical) with strong DRAM orders though dropping significantly into F4Q,” the analyst wrote. The company guided to July quarter revenue and earnings of $6.65 billion and $2.01 per share, respectively, broadly in-line with expectations, he further stated.

JPMorgan On Applied Materials

Analyst Harlan Sur reaffirmed an Overweight rating, while raising the price target from $230 to $240.

Applied Materials reported “solid” quarterly …

Full story available on Benzinga.com

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