$AMAT Q3 Earnings Report

$AMAT Short

Applied Materials provides a wide range of equipment, services, and software for manufacturing semiconductors, display panels, solar products, and coatings for flexible electronics making it one of the world's largest semiconductor equipment makers. In the last quarter, Applied Materials posted results that missed estimates and issued weak guidance, leading some Wall Street analysts to cut their price targets. Supply chain issues have still been hurting the company, including in the latest quarter and all investors will be looking at if this problem is still going to continue or not. The firm will also deal with a $150M impact from COVID-related constraints in Q3. Morgan Stanley cut 2023 earnings estimates on Applied Materials in late July over worries of cuts to semiconductor equipment spending. Earlier in the month Wells Fargo also cut estimates, noting the current quarter is likely to be a difficult time for semiconductor equipment makers. Additionally, over the last three months, Applied Materials EPS estimates have seen 0 upward and 20 downward revisions. Revenue estimates have seen 1 upward and 16 downward revisions. Based on the previous stocks that we have invested in which had downward revisions, it’s usually a sign that the company isn’t on the right track. Factors to Consider Applied Materials’ portfolio strength, expanding position in memory, and increasing new design wins are likely to have a big positive effect on its performance for this quarter. Inventory reductions across memory and high demand in NAND (type of chip) are also likely to have had a negative impact. At the same time, Applied Materials is anticipated to have witnessed solid customer momentum across the automotive industry due to high customer orders. All these factors are expected to have driven sales in the Semiconductor Systems Group segment in the upcoming quarter. However, Applied Materials, for their third-quarter projection for sales in the segment stands at $4.48 billion which is just 0.7% higher than last year. On the other hand, Applied Materials is likely to have continued suffering in its display market segment. For this quarter, their estimate for this segment’s sales is $310 million. The Zacks Consensus Estimate for the same is at $311 million, meaning a decline of 27.8% from the last year.

Initial reaction: Short Researched reaction: Short Top 10 Owners of Applied Materials Inc Stockholder Stake Shares owned Total value ($) Shares bought / sold Total change The Vanguard Group, Inc. 8.04% 69,938,782 7,412,112,116 +648,766 +0.94% BlackRock Fund Advisors 5.21% 45,299,174 4,800,806,461 -979,492 -2.12% SSgA Funds Management, Inc. 4.62% 40,177,420 4,258,002,972 +192,537 +0.48% Capital Research & Management Co.... 3.89% 33,850,576 3,587,484,044 +5,980,777 +21.46% Capital Research & Management Co.... 2.86% 24,875,796 2,636,336,860 +1,607,427 +6.91% Geode Capital Management LLC 1.90% 16,492,625 1,747,888,398 -625,939 -3.66% Northern Trust Investments, Inc.(... 1.20% 10,412,696 1,103,537,522 -407,826 -3.77% Fidelity Management & Research Co... 1.12% 9,719,638 1,030,087,235 -5,778,448 -37.28% Columbia Management Investment Ad... 1.03% 8,984,430 952,169,891 +33,661 +0.38% T. Rowe Price Associates, Inc. (I... 1.03% 8,967,761 950,403,311 -6,503,453 -42.04% P/E Ratio: 14.13 Market Cap: 92,765,870,941 Ceo: Estimate: -3% Time: Aftermarket