Applied Materials (NASDAQ: AMAT) reported second-quarter results that delivered an earnings beat but slightly missed on revenue, while its outlook aligned closely with consensus expectations. Shares fell more than 6% in pre-market trading today following the release.
For Q2, the semiconductor equipment maker posted adjusted earnings of $2.39 per share, topping Wall Street analyst estimates of $2.31. Revenue totaled $7.1 billion, slightly below the $7.12 billion forecast, though still reflecting a 7% year-over-year growth.
GAAP gross margin was 49.1%, while operating margin reached 30.5%. Applied Materials returned nearly $2 billion to shareholders in the quarter through dividends and share repurchases.
In its earnings release, management highlighted “stable demand conditions,” even as macroeconomic challenges and trade-related uncertainties continue to weigh on the sector. The company emphasized the strength of its global supply chain and the advantages of its diversified manufacturing operations as key factors enabling continued resilience in the current environment.
Looking ahead, Applied Materials issued guidance for its fiscal third quarter. The company expects non-GAAP earnings per share of $2.35, plus or minus $0.20, and revenue of approximately $7.2 billion, plus or minus $500 million. Both forecasts are generally in line with current market expectations.
Following the earnings report, several analysts adjusted their outlook on the stock. JPMorgan analyst Harlan Sur lowered his price target on Applied Materials to $210 from $240, but maintained an “Overweight” rating. Evercore ISI also cut its price target, from $220 to $209, while reiterating its “Outperform” rating on the shares. Similarly, Raymond James analyst Srini Pajjuri reduced his price target from $225 to $200, maintaining an “Outperform” rating as well.
Despite the downward adjustments in target prices, the broader analyst community remains bullish on the stock. Applied Materials currently holds an “Overweight” consensus rating, with an average price target of $201.45. This implies a potential upside of more than 15% from current levels.
As of the latest update, shares of Applied Materials (NASDAQ: AMAT) are down 6.19%, trading at $163.93.
David Kirakosyan is a seasoned financial journalist with nearly a decade of hands-on experience in covering the U.S. stock markets. Since 2016, he has written thousands of equity news articles, detailed market analyses, and investment insights for trusted platforms like Benzinga, Investing.com, and StreetInsider. David holds a Master of Science in Finance and is a Level 2 CFA® candidate, reflecting his deep commitment to financial expertise and ethical standards. His reporting combines real-world market experience with a strong academic foundation, helping readers make informed decisions backed by reliable information. Read Full Bio
