Applied Materials stock ticks down despite earnings, revenue beat

The Yahoo Finance Live team discusses the performance of Applied Materials stock and the company's revenue estimates.

Video transcript

JULIA HYMAN: --the company coming out, it looks like, with earnings per share that did beat estimates. And it looks like its forecast might be looking a little more at least in line with what analysts have been predicting. The share's down, perhaps, because of concern over the memory business in particular. That seems to be what's weighing here.

Analysts mixed here. The analysts over at Citi saying the beat was driven by continued strength in the internet of things, communications, automotive power, and sensors. But as we go through the year, we're still going to see weakness in memory. And that's something that we've heard from the likes of Micron, for example, as well.

BRAD SMITH: Yeah, and continued weakness in PCs and smartphones key factor for memory customers there, as they have significantly reduced their investments in 2023. Some of the interesting inflections that they mentioned, as well here that are driving innovation, they've released more than 20 major new products since they formed their ICAPS group about four years ago, and you're probably going to hear a little bit more about that. But this is really a clear trend they're calling towards regionalization of supply chains, and so that's interesting to hear about just in the manufacturing in the capacity that they're looking to bring online even more so. But still, a call that started out with really laying out the challenging macro that they're seeing and how that's impacting the semiconductor industry, at least in the near term, some negative but also some positive, as well, given the number of inclinations we've heard on conference calls to talk about where the chips that they're producing can play a role in even the generative AI landscape and the thrust of investment that we've seen there.