Applied Materials Stock Rises. Expect Tailwinds From China, Says Analyst.

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Applied Materials optimistic guidance sent shares higher on Friday.


Applied Materials
a semiconductor maker whose clients include


(ticker: INTC) and

Taiwan Semiconductor Manufacturing

(TSM), saw its stock rise Friday, in part on resilient demand in China.

That may give hope to the company’s peers as China experiences a bumpy economic slowdown.

Applied Materials

(AMAT) shares were up 3% in premarket trading after beating estimates on earnings and provided better-than-expected guidance after the bell on Thursday.


(AVGO) rose 0.3%.


(QCOM) was down 0.1%

Semiconductor stocks are in a tug of war between forces pulling them in opposite directions. Optimism surrounding artificial intelligence is supporting companies that can capitalize on it. On the other hand, China’s woes and the lingering slump in demand for technology products since the end of the Covid-19 pandemic can pull chip stocks down.

Analysts at KeyBanc led by Steve Barger raised their estimates for Applied Materials earnings after the report yesterday, but kept their Sector Weight rating on the stock. Shares have already added 41% this year. The company said it sees more growth in products related to AI and the Internet of Things.

“AMAT’s strong guidance is a function of its exposure to the more resilient sectors of the semi-cycle including ICAPS (Internet of Things, automotive, power, and sensors) and China, and expected gross margin tailwinds from the latter,” KeyBanc said.

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Write to Brian Swint at [email protected]

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