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Applied Materials drops after revenue miss, options traders see upside
Shares fell sharply after Applied Materials reported fiscal Q2 revenue of $9.12 billion, below the $9.18 billion forecast, while guidance pointed to at least $9.75 billion in Q4 revenue.
Applied Materials’ stock dropped after the semiconductor equipment maker reported lower-than-expected revenue for its third quarter. Yahoo Finance reports AMAT posted better-than-expected adjusted earnings of $3.50 per share for fiscal Q2, but revenue rose 25.0% year over year to $9.12 billion, missing analysts’ $9.18 billion estimate.
Following the Aug. 14 earnings release, Applied Materials shares were down nearly 32% versus their year-to-date high. Yahoo Finance notes that options positioning stayed relatively bullish, with the put-call ratio for contracts expiring in mid-September at 0.93 and an implied upper price level around $560, suggesting the market is pricing in more than an 11% rally over the next 4 to 5 weeks.
On the charts, the stock broke below its 20-day moving average, a sign of bearish near-term momentum, according to the same coverage. For the outlook, AMAT guided for at least $9.75 billion in Q4 revenue, above $9.6 billion consensus, and projected adjusted EPS of $4.02.
The company tied its view to AI-driven demand, including advanced packing revenue expected to rise more than 70% this year, and said it plans to double manufacturing capacity by 2028, Yahoo Finance reports. The stock also trades at a forward price-to-earnings multiple above 44x, the outlet adds.