Applied Materials (NASDAQ: AMAT) came into Thursday's fiscal third-quarter report about 28% beneath its 52-week high of $739.67, closing the session at $534.54. The chip-equipment maker then posted records on nearly every line. Revenue came in at $9.1 billion, up 25% year over year.
Non-GAAP (adjusted) earnings per share rose 41% to a record $3.50. Operating income and operating cash flow set records, too, with the latter topping $3 billion. This Rare Signal Is Flashing Again.
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Management then guided fiscal fourth-quarter revenue to $10.25 billion, plus or minus $500 million, good for 51% year-over-year growth at the midpoint.
The stock fell about 5% in after-hours trading anyway. A company reporting records while its shares sit more than a quarter below their high makes for a disagreement worth taking seriously. What is the market discounting that the income statement isn't showing?
Not only is the growth strong, but it's also speeding up. Revenue rose 15% sequentially -- growth that CEO Gary Dickerson called "the highest quarter-on-quarter revenue growth in the company's history" on the earnings call -- on top of the 25% year-over-year gain. Non-GAAP gross margin reached 50.4%, the 13th consecutive quarter of year-over-year expansion, and non-GAAP operating margin hit a record 34%.
DRAM revenue, which includes high-bandwidth memory (HBM) packaging, grew 52% year over year to record levels. And the fiscal fourth-quarter guide points the same direction: 25% year-over-year growth in fiscal Q3 becomes 51% at the fiscal Q4 midpoint, with non-GAAP earnings per share guided to $4.02, up 85% -- a comparison helped by a soft year-ago quarter, when revenue had dipped. The demand behind those numbers is the artificial intelligence (AI) build-out.
Extract — continue reading at the source.
