Applied Materials jumps as AI demand drives chipmaking tool orders

Core Viewpoint - Applied Materials' shares surged 11.7% in premarket trading due to strong demand for AI and a tightening memory market, leading to increased orders for chipmaking tools and a positive revenue forecast for Q2 [1] Company Summary - Applied Materials projected Q2 revenue of approximately $7.65 billion, exceeding analysts' average estimate of $7.01 billion, with an adjusted profit forecast of $2.64 per share compared to estimates of $2.28 [1] - CEO Gary Dickerson highlighted that the quarter's performance was driven by accelerated investments in AI computing, with demand for higher-performance and energy-efficient chips [1] - The company is positioned to benefit from the expansion of AI data centers and rising demand for high-bandwidth memory, which are tightening chip supply chains [1] Industry Summary - The semiconductor equipment market is expected to grow, with industry group SEMI forecasting a 9% increase in equipment sales to $126 billion by 2026 and a further 7.3% increase to $135 billion by 2027 [1] - Analysts noted that Applied Materials holds a leadership position in DRAM/HBM, Advanced Logic, and Packaging, benefiting from strong spending driven by generative AI [1] - The positive outlook for Applied Materials has also lifted shares of other chip-equipment stocks, including ASML, Lam Research, and KLA [1]