Semiconductor giant Applied Materials (NASDAQ:AMAT) could highlight new AI-related products and how export restrictions to China are impacting the sector when the company reports fourth-quarter financial results Thursday after market close.
Here are the earnings estimates, what analysts are saying ahead of the report, and key items to watch.
Earnings Estimates: Analysts expect Applied Materials to report fourth-quarter revenue of $6.67 billion, down from $7.04 billion in last year's fourth quarter, according to data from Benzinga Pro.
The company has beaten analyst revenue estimates in nine of the last 10 quarters, including the most recent fourth quarter.
Analysts expect Applied Materials to report fourth-quarter earnings per share of $2.10, down from $2.32 in last year's fourth quarter.
The company has beaten analyst earnings-per-share estimates for 13 straight quarters.
Guidance from the company calls for fourth-quarter revenue of $6.2 billion to $7.2 billion and earnings per share to be in a range of $1.91 to $2.31.
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What Analysts Are Saying: Morgan Stanley analyst Joseph Moore said Applied Materials could report a strong quarter and guidance above estimates.
"We believe AMAT can alleviate investor concerns around China, TSMC share, and the equity story that have weighed on YTD performance," Moore said.
The analyst maintained an Overweight rating with a price target of $256 ahead of the earnings report.
Moore said Applied Materials is likely to guide first-quarter revenue up mid-single digits, versus a Street consensus estimate of around 2% growth.
The analyst said Applied Materials could be "changing the narrative," and that the quarterly results could show upside in DRAM (dynamic random access memory) and de-risking of China concerns.
"We think the risk-reward is skewed to the upside."
Moore said without more export restrictions on China, the worst year-over-year decline is likely behind the company and the "outlook is derisked."
Here are other analyst ratings on Applied Materials and their price targets:
- Stiefel: Maintained Buy rating, raised price target from $215 to $250
- Barclays: Maintained Equal-Weight rating, raised price target from $170 to $250
- Mizuho: Maintained Neutral rating, raised price target from $175 to $215
- Bank of America: Upgraded from Neutral to Buy rating, raised price target from $180 to $250
Key Items to Watch: Applied Materials stock has seen a surge in interest in recent weeks with the stock appearing on the Stock Whisper Index recently.
The company has been announcing new products and initiatives that could drive future growth.
Applied Materials announced a plan to reduce its global workforce by around 4% last month. The company's CEO, Gary Dickerson, said the move was being done to simplify the organizational structure of the company.
Applied Materials recently unveiled new manufacturing systems that will enhance the performance of memory chips used for AI computing. The company said it will help chipmakers make faster memory chips.
In the third quarter, the company said it was leveraging its supply chain and strong customer relationships to navigate short-term uncertainties.
After a potential revenue decline in the fourth quarter that the company had planned on, attention could quickly turn to guidance for the next fiscal year.
AMAT Price Action: Applied Materials stock is up 0.6% to $230.07 on Wednesday versus a 52-week trading range of $123.74 to $242.44. Applied Materials shares are up 40.1% year-to-date in 2025.
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