The company reported better-than-expected results for the first quarter of FY24 last month, with cash revenue roughly flat from last year at $6. 71 billion and adjusted profit up about 5%. at $2. 13 compared to participation. Investors also most likely think the semiconductor bear cycle has bottomed out, with memory prices rising and PC sales improving slightly after a near double-digit decline in 2023. Additionally, the industry is reaping the benefits of a growing demand in the synthetic intelligence box. space. AI workloads are compute-intensive and require a constant increase in computing power and memory. Applied expects to gain advantages in line with demand as it is well diversified across the entire semiconductor production price chain, providing equipment and facilities ranging from etching and deposition technologies to inspection and packaging equipment. Additionally, China is increasingly focusing on developing its own semiconductors as it makes technological self-sufficiency a priority. However, Chinese chipmakers continue to rely heavily on Applied (and other American companies) products and facilities to make their newest chips. For example, Huawei Technologies and its partner Semiconductor Manufacturing International Corp relied on the technology, adding Applied equipment, to manufacture the newest 7-nanometer chip for the flagship Mate 60 Pro smartphone. In the first quarter of FY24, Sales in China were about $3 billion, about 45% of total cash, up 17% year-over-year.
AMAT shares have seen incredibly strong gains of 145%, rising from $85 levels in early January 2021 to around $210 now, up around 40% for the S.
However, the accumulation in AMAT’s inventory is constant. Inventory returns were 82% in 2021, -38% in 2022, and 66% in 2023. By comparison, the yields of the S
Applied Materials’ inventory is currently trading at approximately $210 per share. This translates to a valuation of approximately 28 times projected earnings for fiscal 2024. While the multiple increases slightly through old levels, the inventory value is reasonable. Trends such as generative artificial intelligence and cloud computing could propel AMAT stock higher. In addition, Applied is also looking to expand its profit streams. In the past year, the company has expanded into lithography, taking on Dutch giant ASML, best known for its high ultraviolet radiation. Lithography technology. We cost Applied Materials’ inventory at $202 per share, which is almost in line with the existing market value. Check out our Applied Materials Valuation research to get a deeper look at what drives our inventory value estimation.
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