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Applied Materials Inc AMAT Stock Quote

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Morningstar‘s Stock Analysis AMAT

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Applied Materials' Supply Chain Headwinds Alleviate in Q3; Shares Undervalued Relative to $142 FVE

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

Wide-moat Applied Materials reported fiscal third-quarter revenue above the midpoint of guidance and our expectations. Despite recent supply chain headwinds continuing to prevent the firm from fully meeting customer demand, the firm was able to deliver stronger results thanks to better-than-expected equipment output. Management maintained its view that unconstrained demand for wafer fab equipment, or WFE, to be over $100 billion in 2022, but conceded the actual figure would be in the mid-$90 billion range due to shipment delays. That said, we expect WFE spending in 2023 to be down year over year due to weaker memory investments, though we think leading-edge logic and foundry capital expenditures will be more resilient due to strategic investments by the likes of TSMC, Intel, and Samsung.

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Key Statistics AMAT

Company Profile AMAT

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.

3050 Bowers Avenue, P.O. Box 58039
Santa Clara, CA, 95052-8039
T +1 408 727-5555
Industry Semiconductor Equipment & Materials
Most Recent Earnings Jul 31, 2022
Fiscal Year End Oct 31, 2022
Employees 27,000

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