Applied Materials Earnings: Good Results and Guidance Agrees With Our Upbeat Outlook for Fiscal 2025

We maintain our $193 fair value estimate for shares of wide-moat Applied Materials after October-quarter results fit our long-term growth thesis. We believe Applied is well-positioned for rising chip demand and higher chip complexity over the long run. In the medium term, we see artificial intelligence investment as a significant driver, but view the firm’s total opportunity as broad and representing the entire chip market. We expect strong medium-term growth for Applied and expect it to continue taking incremental share in the chip equipment market. Shares dipped afterhours, we think on revenue guidance that met our expectations but missed those of more optimistic investors. We now see shares as lightly undervalued.