AMAT Earnings: Demand Holding Up So Far

Core Viewpoint - Applied Materials reported mixed second-quarter financial results, with revenue growth falling short of expectations while adjusted earnings per share exceeded them [3][6]. Financial Performance - Revenue for Q2 2024 was $6.65 billion, a 7% increase year-over-year, but missed analyst expectations [2][3]. - Adjusted earnings per share rose to $2.09, reflecting a 14% increase and beating expectations [2][3]. - The operating margin improved to 30.7%, up by 1.7 percentage points [2][3]. - Semiconductor systems revenue reached $4.90 billion, also a 7% increase [2]. Customer Demand and Market Conditions - There has been no significant change in customer demand despite global economic uncertainties, according to the CFO [4]. - Foundry and logic semiconductor equipment accounted for 65% of semiconductor systems revenue, unchanged from the previous year [4]. - DRAM-related revenue decreased to 27% from 32%, while flash memory-related revenue increased to 8% from 3% [4]. Future Outlook - For Q3 fiscal 2025, the company expects revenue between $6.7 billion and $7.7 billion, with adjusted EPS between $2.15 and $2.35, indicating a wide range due to uncertainty [5]. - The stock price fell approximately 4% in after-hours trading following the earnings report, reflecting investor concerns over missed revenue expectations and uncertain outlook [6]. Risks and Considerations - While current customer demand remains stable, potential economic slowdowns and changes in AI infrastructure investments could impact future demand [7].