Applied Materials (AMAT) Earnings Preview: What Investors Should Expect

Applied Materials (NYSE: AMAT) will report its quarterly earnings today, after markets close. The semiconductor machinery manufacturer has consistently outperformed expectations, with last quarter’s revenue reaching $6.78 billion—up 5.5% year-over-year, beating Wall Street estimates by 1.6%. Analysts now expect revenues of $6.97 billion, a 3.7% year-over-year increase, with adjusted earnings of $2.19 per share.

In the past two years, Applied Materials has beaten revenue forecasts in every quarter, averaging 3.1% above analysts’ estimates. This strong track record and analysts’ reaffirmed forecasts over the past month suggest stability, a factor many investors may find reassuring given recent stock volatility.

Peers’ Performance Hints at Sector Trends

Applied Materials’ peers in semiconductor manufacturing have already shared their Q3 results, providing insights into sector performance. Teradyne reported a 4.8% year-over-year revenue increase, topping analysts’ estimates by 3%, though its stock fell 11.1% post-earnings. Lam Research reported a significant 19.7% revenue growth and exceeded expectations by 2.7%, with a post-earnings stock gain of 4.8%.

Such mixed market reactions to positive earnings results may reflect ongoing market pressures, including inflation fears and investor wariness of growth stocks. On average, semiconductor manufacturing stocks have declined 3.4% over the past month, while Applied Materials shares are down 2.4% in that same period. Currently trading around $186.50, analysts have an average price target of $229.01 on Applied Materials, suggesting potential upside if the company meets or exceeds earnings expectations.

AI Impact on the Semiconductor Market

The rapid expansion of AI has brought increased attention to semiconductor stocks, especially those enabling AI infrastructure. While Nvidia (NASDAQ:NVDA) and AMD (NYSE:AMD) are trading near record highs due to this trend, Applied Materials could be an attractive alternative for investors seeking exposure to AI with a company that has a consistent track record of profitability.