Semiconductor Test Equipment Manufacturer Applied Materials (NASDAQ: AMAT) Stocks have been a reliable gauge of the chip industry.Companies are in the midst of a global chip shortage and supply chain disruption. Strengthening the supply chain is a top priority.Q2 FY22 missed expectations for some reason supplier Delayed orders due to China COVID lockdown in April. This had a $150 million impact on the quarter, which will recover later as orders were not cancelled but delayed.Restoring supply chain capacity online is the top priority.The company is actively streamlining process installation into mass production chips For its clients, this will reduce the time it would normally take several months. Companies will emerge from supply chain disruptions as more efficient operators with stronger supplier engagement.This makes Applied Materials the Year-end stories for early 2023 Because things will improve as supply chains return to normal.The company has booked orders and a growing backlog, so it believes demand is not limited fab Provides the industry with more than $100 billion in equipment. It’s just a matter of when, not whether supply chain issues are resolved.Cautious investors who have been patiently waiting to gain exposure to the semiconductor supply chain recover Opportunistic pullback levels in Applied Materials stock can be observed.
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Fiscal 2022 Second Quarter Earnings Release
On May 19, 2022, Applied Materials reported results for the second quarter of fiscal 2021 for the quarter ended April 2022. The company reported diluted earnings per share (EPS) of $1.85, missing analysts’ consensus estimate of $1.90 (-$0.05). Revenue rose 11.9% year over year to $6.25 billion, also missing estimates of $6.35 billion. The company insists demand has never been stronger, but is limited by ongoing supply chain issues. The company generated $415 million in cash and returned $2.01 billion to shareholders, including $1.8 billion in buybacks and $211 million in dividends. Gary Dickerson, CEO of Applied Materials, commented, “Demand for Applied Materials’ products and services has never been greater, yet we remain constrained by ongoing supply chain issues. Our priority is to be fast and creative throughout the supply chain. work to bring more industry capacity online while accelerating the technological transformation that we believe will enable Applied Materials to outperform the semiconductor market in the years to come.”
Downside Guidance
Applied Materials provided downside EPS guidance of between $1.59 and $1.95 per share for the third quarter of fiscal 2022, compared with the consensus analyst estimate of $2.04. The company expects revenue in the third quarter of fiscal 2022 to be between $5.85 billion and $6.65 billion, compared with analysts’ estimates of $6.68.
Conference Call Takeaway
CEO Dixon said at the outset that demand has never been stronger or more widespread, but the ability to meet growing demand has been stifled by ongoing supply chain constraints. He described the second quarter of 2022 as a two-part story, as key bottleneck components in February and March were resolved, but the COVID shutdown in April further disrupted supply chains. The shutdown impacted $150 million in the quarter as some suppliers temporarily closed, but orders were delayed and not cancelled. The priority, he said, is to address supply chain issues and bring more capacity online. In particular, the shortage of silicon components and other parts of the subsystems of its tools. The company is working to mitigate disruption, “We are doing everything we can to serve our customers, from sending application resources to supplier sites, qualifying replacement parts, investing in our supply chain to working with customers in creative ways to Expedited Shipments, Including Mergers” The company is working to reduce the time it can take to ship the first production wafer from the factory to a customer’s factory, which can take several months. These adjustments will ultimately lead to more efficient workflows and stronger supplier engagement.
AMAT Opportunity Retracement Level
use Rifle Chart Weekly and daily time frames provide a precise view of the AMAT stock’s playing field.Weekly Rifle chart slides again to retest previous bottom near $101.35 Fibonacci (fib) levels. The weekly rifle chart formed an inverse puppy breakdown with the weekly 5-period moving average (MA) at $110.93, followed by a 15-period moving average down to $118.17. The weekly lower Bollinger Bands (BBs) are at $93.67. The weekly Stochastic is poised to cross down in a test of the 20-band.The initial rally peaked on a weekly basis Market Structure Low (MSL) There is a buy trigger at $119.70, a breakout is needed to reverse the downtrend. The daily rifle chart breaks down the 5-period moving average to $110.45, followed by the 15-period moving average to $112.16 and the 50-period moving average to $114.15. The daily stochastic formed a mini inverse puppy under the 80-period, and when it fell to the 50-period MA, it made a full swing attempt. The daily lower BB price is $100.65. Cautious investors can watch for opportunistic pullback levels at $99.37, $95.12, $90.26, $85.46, $84.20, $80.93, $78.76, and $74.54. The upside trajectory ranges from $116.58 to $137.18.
