Applied Materials Rose 15% on Thursday and Is Still More Than 30% Below Its High. It Reports on Aug. 13.
Applied Materials stock jumped about 15% on Thursday, July 30, following record results and strong guidance from fellow equipment maker Lam Research. The company reports fiscal third-quarter results on Thursday, Aug. 13.
Intelligence analysis by Llama
Applied Materials stock rose 15% on Thursday, July 30, after Lam Research reported record results and strong guidance. The company's next earnings report is on August 13.
Imagine you're at a big party, and your friend tells you they just got a new job with a huge raise. You're excited for them, and you start to think that maybe you'll get a raise too. That's kind of what happened with Applied Materials stock. A friend of theirs, Lam Research, did really well, and that made Applied Materials stock go up too. Now, Applied Materials has to show that they're doing well too, and that's what their next report is all about.
Analysis
A $60B Vote of Confidence
Applied Materials, a leading manufacturer of semiconductor equipment, saw its stock jump about 15% on Thursday, July 30, following record results and strong guidance from fellow equipment maker Lam Research. The catalyst for the move was not Applied's own news, but rather the success of its peer. Lam Research reported record June-quarter revenue, operating margin, and earnings per share on Wednesday, and it guided for about $8.1 billion in September-quarter revenue. Investors marked up equipment stocks across the board on Thursday, and Applied Materials, already up more than 200% from its 52-week low of $154.47, moved with them.
Why Cursor?
The Aug. 13 test Applied's own most recent update supports the optimism. In May, the company reported record fiscal second-quarter results: Revenue rose 11% year over year to $7.91 billion, and non-GAAP (adjusted) earnings per share grew 20% to $2.86. Management guided for fiscal third-quarter revenue of about $8.95 billion, plus or minus $500 million, which would be another record. Also worth noting, Applied raised its quarterly dividend 15% this year, to $0.53 per share, its ninth straight annual increase. CEO Gary Dickerson said at the time that the company expects its semiconductor equipment business to grow more than 30% in calendar 2026. In the earnings release, he said the artificial intelligence (AI) build-out, combined with the company's positions in leading-edge logic, DRAM, and advanced packaging, provides 'an exceptionally strong foundation for sustained, multi-year revenue and profit growth.'
The Road Ahead
The Aug. 13 report has two jobs. It needs to deliver on the roughly $9 billion revenue guide, and it needs to show demand strong enough to back that 30% growth call for the calendar year. Until then, Thursday's gain is a bet on results Applied hasn't reported yet. The AI spending wave that lifted Lam Research favors the whole equipment group, and Applied's May numbers suggest it is riding the same demand. But a move this large gets confirmed on earnings day, and investors will get their answer in less than two weeks.
Key points
- Applied Materials stock jumped about 15% on Thursday, July 30, following record results and strong guidance from fellow equipment maker Lam Research.
- The company reports fiscal third-quarter results on Thursday, Aug. 13, which will show whether it can deliver on its revenue guide and support its 30% growth call for the calendar year.
- Applied Materials' position in the AI build-out and its leading-edge logic, DRAM, and advanced packaging positions provide a strong foundation for sustained revenue and profit growth.
If Applied Materials delivers on its revenue guide and shows strong demand, its stock could continue to rise. The company's position in the AI build-out and its leading-edge logic, DRAM, and advanced packaging positions provide a strong foundation for sustained revenue and profit growth.
If Applied Materials fails to deliver on its revenue guide or shows weak demand, its stock could fall. The company's reliance on the AI spending wave and its position in the semiconductor equipment market make it vulnerable to changes in demand.
