The largest U.S. semiconductor equipment manufacturer stands to benefit from sustained demand for AI chips, which are rapidly consuming global memory supplies and prompting chipmakers to expand production capacity, News.Az reports, citing Reuters.
Analysts say this dynamic could underpin multi-year growth for the sector.
The Santa Clara, California-based company projected second-quarter revenue of approximately $7.65 billion, plus or minus $500 million, exceeding analysts’ average estimate of $7.01 billion, according to LSEG data. It also forecast adjusted earnings of $2.64 per share, above market expectations of $2.28.
Chief Executive Officer Gary Dickerson said the company’s performance was “fueled by the acceleration of industry investments in AI computing.” He added that expanding AI workloads are driving demand for higher-performance and more energy-efficient chips across advanced logic, high-bandwidth memory, and next-generation packaging technologies.
The rally comes amid rapid AI data center expansion by hyperscalers and increasing demand for high-bandwidth memory, factors that are tightening supply chains and spurring additional investment in wafer fabrication and advanced packaging equipment.
In December, industry association SEMI projected that global sales of wafer fabrication equipment would rise about 9% to $126 billion in 2026 and grow a further 7.3% to $135 billion in 2027.
RBC analysts noted that Applied Materials holds a strong leadership position in DRAM, high-bandwidth memory, advanced logic, and packaging, and is benefiting from robust generative AI-related spending.
The upbeat outlook also lifted other semiconductor equipment stocks. Shares of ASML, the world’s largest supplier of chipmaking equipment, rose 1.8%. U.S.-based peers Lam Research (LRCX) gained 2%, while KLA (KLAC) advanced more than 1% in thin trading volumes.
Applied Materials shares have climbed roughly 28% so far this year, outperforming the Philadelphia Semiconductor Index, which has risen about 14% over the same period.
