Applied Materials Stock Jumps as AI-Driven Chip Demand Lifts Profits

Core Insights - Applied Materials stock has nearly doubled over the past 12 months, reflecting strong market performance driven by AI-related demand for chips [1] - The company anticipates its semiconductor equipment business to grow by more than 20% this year, fueled by rising demand for advanced, energy-efficient chips [1] - In the latest quarter, Applied Materials reported a profit increase of over 70%, reaching $2.03 billion or $2.45 per share, despite a 2% decline in revenue to $7.01 billion [1] Company Performance - The demand for higher performance and energy-efficient chips is driving significant growth in leading-edge logic, high-bandwidth memory, and advanced packaging [1] - The forecast for the current quarter indicates revenue between $7.15 billion and $8.15 billion, with adjusted earnings per share projected between $2.44 and $2.84, suggesting double-digit growth in both metrics [1] - The stock has risen nearly 28% since the beginning of the year and is up about 95% over the last 12 months [1] Industry Context - The rapid expansion of AI data centers is increasing the demand for semiconductors and the specialized tools required for their production, positioning Applied Materials at the forefront of the AI investment cycle [1] - The CEO estimates that global semiconductor industry revenues will reach $1 trillion this year, indicating robust market growth [1] - The company faces a $252 million penalty from the Department of Commerce for illegally exporting chipmaking equipment to a company in China, which may impact its operations [1]