Up 6%, What's Next For Applied Materials Stock?

Core Insights - Applied Materials stock has gained nearly 6% in recent trading and is up about 22% year-to-date, while Texas Instruments has increased by approximately 24% in the same timeframe [1] - The Federal Reserve's recent interest rate cut of 50 basis points is expected to lower borrowing costs, potentially increasing demand for semiconductor fabrication equipment [1] - The semiconductor industry is experiencing a recovery, with Applied Materials reporting Q3 2024 revenue growth of 5% year-over-year to $6.8 billion and earnings of $2.12 per share [2] Group 1: Market Trends - The semiconductor cycle is improving after a challenging year, with memory prices stabilizing and strong demand emerging [2] - The artificial intelligence sector is driving robust demand for advanced manufacturing processes, which Applied Materials is well-positioned to support [3] - The stock has shown volatility over the past three years, with returns of 84% in 2021, -38% in 2022, and 68% in 2023, contrasting with the more stable performance of the Trefis High Quality Portfolio [3] Group 2: Financial Projections - Applied Materials is guiding for Q4 FY'24 revenue of approximately $6.93 billion, with adjusted diluted earnings projected between $2.00 and $2.36 per share, indicating potential growth of up to 8.5% [3] - The current stock price is around $197 per share, with a valuation estimate of $222 per share, suggesting a potential upside of about 10% [3]