Applied Materials likely to show strength in mature nodes in Q3
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Semiconductor equipment company Applied Materials (NASDAQ:AMAT) is slated to report third-quarter results after the close of trading on August 17 and Wall Street analysts believe it will show strength in mature nodes.
Wells Fargo analyst Joe Quatrochi, who has an overweight rating and $170 price target on Applied Materials (AMAT), said he expects a "modest beat [and] raise" compared to Wall Street consensus, aided by strength in mature nodes in foundry and logic and Chinese dynamic random access memory.
"[W]e view upside drivers from ICAPS strength (notably Domestic China) and a better understanding of revenue contributions from China DRAM export restrictions," Quatrochi wrote in an investor note.
In addition, Quatrochi noted that its fastest growing ICAPS regions are the U.S., Europe and Japan, though investors believe that China could help drive upside.
Quatrochi also noted that other points of focus include deferred revenue trend, gross margins and the possibility that the company stays positive on its position in advanced packaging.
B. Riley analyst Craig Ellis who reiterated his buy rating and $175 price target on Applied Materials (AMAT), said the company could see "solid" results from ICAPS following results from KLA Corp. (KLAC) and Lam Research (LRCX).
Applied Materials (AMAT) may also benefit from its diverse geographic footprint and its "relatively" high backlog.
"On industry spending matters, we suspect a full-year viewâwhich was absent on F1Q23 and F2Q23 calls, if offered, could echo LRCX and KLAC mid-$70B views, albeit with AMATâs own H/H linearity tilting toward [first-half versus second-half] for peers," Ellis added.
A consensus of analysts expect Applied Materials (AMAT) will earn $1.75 per share on $6.18B in revenue.

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