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Core Viewpoint - Applied Materials is well-positioned to benefit from the increasing capital expenditures driven by the generative artificial intelligence boom, with potential for its stock to reach around $380 in the coming years [2][10]. Group 1: Market Trends and Growth Potential - Capital spending on advanced chip manufacturing equipment is expected to nearly double from 2023 to 2028, with global expenditures anticipated to exceed $100 billion in 2025 [3]. - The company has experienced a robust annual revenue growth rate of 13% over the last five years, with projections of reaching $29 billion in FY'25, and potential growth to approximately $53 billion by FY'28, representing an increase of roughly 81% [4][9]. - The surge in generative AI is driving a significant increase in semiconductor demand, necessitating advanced manufacturing processes for AI chips, which Applied Materials specializes in [5]. Group 2: Competitive Positioning - Applied Materials serves major clients such as TSMC, Samsung, and Intel, positioning it as a central player in both the logic and memory sectors of the chip market [3]. - The company has a considerable exposure to China, which accounted for over a third of its revenue in FY'24, but recent trade agreements may improve access to this essential growth market [6]. Group 3: Financial Performance and Projections - The adjusted net margins of Applied Materials have increased from 19.6% in FY'19 to 26.5% in FY'24, with expectations to rise to approximately 31% by FY'28 due to a focus on new technologies and effective cost management [9]. - If earnings grow by 2.2 times over the next few years, the P/E ratio could stabilize around 18x, potentially doubling the stock price from $190 to roughly $380 [10].