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Applied Materials Inc AMAT

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Applied Materials Maintains Robust Wafer Fab Equipment Outlook for 2021; Raising FVE to $125

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

Wide-moat Applied Materials reported fiscal second-quarter results at the high end of management’s guidance while guiding fiscal third-quarter revenue above our expectations. Applied and its peers have all called for strong growth in 2021, driven by record capital expenditure levels at TSMC and Intel as well as improving DRAM spending. Management expects Applied’s third-quarter revenue to be up 35% year over year at the midpoint, with momentum persisting into the back half of calendar 2021. Consequently, we are raising our fair value estimate to $125 per share from $103. The shares look fairly valued at current levels.

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Company Profile

Business Description

Applied Materials is the world's largest supplier of semiconductor manufacturing equipment, providing materials engineering solutions to help make nearly every chip in the world. The firm's systems are used in nearly every major process step with the exception of lithography. Key tools include those for chemical and physical vapor deposition, etching, chemical mechanical polishing, wafer- and reticle-inspection, critical dimension measurement, and defect-inspection scanning electron microscopes.

Contact
3050 Bowers Avenue, P.O. Box 58039
Santa Clara, CA, 95052-8039
T +1 408 727-5555
Sector Technology
Industry Semiconductor Equipment & Materials
Most Recent Earnings Apr 30, 2021
Fiscal Year End Oct 31, 2021
Stock Type Cyclical
Employees 24,000

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