Where Will Applied Materials Stock Be in 1 Year?

Core Viewpoint - The semiconductor equipment supplier Applied Materials has underperformed compared to the S&P 500, but the outlook for 2024 and beyond appears promising due to expected industry growth and demand for advanced manufacturing technologies [1][2]. Company Performance - Applied Materials' revenue for fiscal 2024 increased by 2% to $27.2 billion, with adjusted earnings rising 7% to $8.65 per share [2]. - The company anticipates a revenue of $7.15 billion for the current quarter, reflecting a 7% increase from the same quarter last year [3]. Industry Outlook - Global semiconductor sales are projected to rise by 19% to $627 billion in 2024, following an 8.2% decline in 2023 [2]. - The semiconductor industry's capacity is expected to grow by 7% in 2025, following a 6% increase in 2024 [4]. - The advanced chip production capacity is set to grow at 17%, driven by major players like Samsung and TSMC [5]. Market Opportunities - Applied Materials expects its revenue from gate-all-around (GAA) manufacturing equipment to double, aiming to capture over 50% of the GAA equipment market [6]. - Revenue from high-bandwidth memory (HBM) packaging was $700 million in fiscal 2024, with expectations for significant growth as the HBM market is projected to reach $21 billion in 2025 [7]. - Major foundries are expected to invest around $70 billion in U.S. fabrication plants, which will benefit Applied Materials [8]. Analyst Expectations - Analysts have set a 12-month median price target of $225 for Applied Materials, indicating a potential 30% increase from current levels [10]. - If the company achieves a 10% increase in earnings for fiscal 2025, the stock price could rise to $285, suggesting stronger gains than currently anticipated [11][12].