Applied Materials In 2025: Cloudy With A Chance Of Windfalls

Summary:

• Applied Materials faces headwinds in WFE spending and geopolitical uncertainties, leading to a Hold rating despite resilient pricing strategies and margin expansion.
• The company’s revenue streams from China and growth in DRAM and services are positive, but foundry logic weakness and reduced China exposure pose risks.
• Management’s cautious outlook for 2025, coupled with Taiwan Semiconductor’s modest capex growth, tempers expectations for Applied Materials’ growth next year.
• Despite uncertainties, Applied Materials’ strong margin profile and potential for earnings growth make it a stock to watch, pending clearer global trade policies.

Investment Thesis

Applied Materials (NASDAQ:AMAT), the maker of semiconductor WFE, or Wafer Fabrication Equipment, has experienced a phenomenal few years where fabrication companies doubled down on purchasing more fabrication equipment to cope with the elevated demand for chips being

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