Why $AMAT Dropped

Turnaround Essay

For its third quarter, Applied Materials reported $6.5 billion in revenue, which was not only up 5% compared to last year, but also a new all-time high for the company. Going in the opposite direction was their adjusted net income, which was down by 3% as compared to last year. However, that number was still enough to beat the estimates. However, the statements that were said by the company’s management didn’t make investors happy. For example, the CEO said, “Memory spending is expected to be lower than in 2022 as macro uncertainty and weakness in consumer electronics and PCs causes these customers to defer some capacity additions." Considering the fact that this shows slow growth for the company’s future, many people started selling their shares. They also stated that 2023 demand is likely to decline from 2022, as macro uncertainty and lower demand for memory-based products are expected to have an effect on their revenue. This shows that even if you are able to beat every estimate, they don’t mean anything as long as you don’t have a good outlook for the company