What To Watch For In Applied Material’s Q4 Earnings

by Trefis Team
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Applied Materials
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After a strong performance over the past few quarters, we expect Applied Materials (NYSE:AMAT) to post another strong quarter when it reports its fiscal Q4 2017 earnings on November 16th. The company expects revenue between $3.85 and $4 billion, with the midpoint indicating over 19% year-over-year growth. The company has been able to sustain growth in both its top line and bottom line due to favorable industry trends. Applied’s stock price has more than doubled over the year, largely due to the company’s growth outlook. Driven by multi-year inflections and new demand drivers, the company’s orders and earnings in Q3 2017 were at an all-time high. We expect this growth momentum to continue in the near term.

Supported by significant developments in emerging technologies such as the Internet of Things (IoT), virtual reality, augmented reality, big data, artificial intelligence, and self-driving cars in 2016, the company has immense growth potential going forward. These areas have the potential to significantly increase semiconductor spending and drive the advances in silicon technology in the future. Additionally, the company also believes that capital equipment spending has become less cyclical and more normalized over time, due to increasing demand in these areas.

We believe that the Applied Materials stock is worth $37, which is below the market price.

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