Applied Materials (AMAT) Reiterates Hold on Fears of CapEx Pushouts in 1H22 - Summit Insights

Summit Insights analyst Kinngai Chan reiterated a Hold rating on Applied Materials (NASDAQ: AMAT) after July quarter (3QFY21) revenues grew 8% QoQ to $6.20B, outpacing consensus of $5.94B on continued strength from its silicon system group. Sales of its core silicon systems group (SSG) grew 12% QoQ to $4454M due to foundry and DRAM strength. DRAM-related shipments rebounded 60% QoQ to $891M and comprised 20% of SSG sales. NAND declined 37% QoQ to $757M after 5-quarters of consecutive sequential growth.

The analyst stated "We believe many of AMAT's customers are pulling in their capital equipment investments due to delivery timing concerns related to CV19 work disruptions in Malaysia. In addition, demand remains robust due to double ordering. We, however, have seen some weakening of demand in the consumer/education PC and Android smartphone end-markets and have seen key client SSD and mainstream commodity DRAM price decline in the past month. However, we believe there's a possibility of a memory Capex spend pushout in 1H22 after major new product roll-outs such as DDR5 and 1yy-tier 3D NAND are completed, and the double ordering normalizes."

For an analyst ratings summary and ratings history on Applied Materials click here. For more ratings news on Applied Materials click here.

Shares of Applied Materials closed at $129.20 yesterday.

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