How To Trade AMAT Stock As Earnings Approach?

Company Overview - Applied Materials (NASDAQ: AMAT) is set to announce its Q3 FY'25 earnings on August 14, 2025, with expected earnings of approximately $2.36 per share, up from $2.12 in the same quarter last year, and revenues anticipated to rise by around 6% to $7.2 billion [2] - The company currently has a market capitalization of $144 billion, with revenue over the past twelve months at $28 billion, operating profits of $8.3 billion, and a net income of $6.8 billion [4] Industry Trends - The surge in AI is driving increased demand for semiconductors, necessitating greater computational power, enhanced memory capacity, and more complex chips [3] - Applied Materials' advanced tools are crucial for manufacturing next-generation AI chips, including high-bandwidth memory (HBM), gate-all-around (GAA) transistors, and backside power delivery (BPD) [3] - However, U.S. government restrictions on the sale of advanced chip-manufacturing equipment to Chinese firms may temper growth, as evidenced by a 37% year-over-year decline in revenue from China in Q2 [3] Earnings Performance Insights - Historical data shows that Applied Materials has recorded 19 earnings data points over the past five years, with 7 positive and 12 negative one-day post-earnings returns, resulting in a positive return rate of approximately 37% [6] - The median of the 7 positive returns is 3.9%, while the median of the 12 negative returns is -3.6% [6] - Correlation analysis indicates that understanding the relationship between short-term and medium-term returns post-earnings can inform trading strategies [7]