By Juby Babu
May 14 (Reuters) – Applied Materials on Thursday forecast third-quarter revenue and adjusted profit above Wall Street estimates, betting that heavy spending on data centers and AI infrastructure will sustain strong demand for its chip-making tools.
Shares of the Santa Clara, California-based company, which also beat second-quarter revenue and profit estimates, rose 3% in extended trading.
The ongoing AI boom is benefiting equipment suppliers such as Applied Materials, as building more powerful AI chips requires not only more silicon wafers but also complex manufacturing processes.
“With rising demand and increasing long-term visibility from customers, we see an exceptionally strong foundation for sustained multi-year revenue and profit growth,” CEO Gary Dickerson said on a post-earnings call.
The company expects over 30% growth in its semiconductor equipment business and a more than 50% increase in packaging revenues for 2026.
The surge in AI computing investment from leading technology firms and enterprises is pushing chipmakers such as TSMC and Samsung to expand their manufacturing capacity, boosting orders for Applied’s sophisticated equipment used to produce and package cutting-edge chips.
The strong results and forecast reflect a “strengthening of the ongoing AI upcycle for wafer fabrication equipment investments,” William Kerwin, senior equity analyst for technology at Morningstar, said.
Applied forecast third-quarter revenue of about $8.95 billion, plus or minus $500 million, above analysts’ average estimate of $8.09 billion, according to data compiled by LSEG.
Its adjusted profit forecast of $3.36 per share, plus or minus 20 cents, also exceeded the average analyst estimate of $2.88 per share.
The company has increased its build plan, inventory positions and logistics capacity, CFO Brice Hill said, as it looks to ensure operational and supply chain readiness.
For the second quarter ended April 26, Applied reported revenue of $7.91 billion, above analysts’ average estimate of $7.65 billion.
Applied’s quarterly adjusted profit of $2.86 per share also beat an estimate of $2.66.
(Reporting by Juby Babu in Mexico City; Editing by Shinjini Ganguli)
