JPMorgan Chase: Raising the target price of Applied Materials to $240 is expected to outperform the WFE market in the next few years

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J.P. Morgan issued a report stating that Applied Materials\’ performance in the fiscal quarter ended at the end of April was solid, driven by the continued strength of the ICAPS division (Internet of Things, Communications, Automotive, Power and Sensors) and DRAM business, growth in the emerging field of advanced packaging, and continued service business Strongly supported

J.P. Morgan issued a report saying that Applied Materials\’ second quarter financial performance ended at the end of April was solid. Driven by the continued strength of the ICAPS division (Internet of Things, Communications, Automotive, Power and Sensors) and DRAM business, growth in the emerging field of advanced packaging, and continued service business Strongly supported.
Looking forward to the current financial quarter ending at the end of July. Benefiting from the increase in front-end wafer foundry and logic expenditures, as well as the initial investment in major technological innovations, advanced DRAM and HBM expenditures, and the continued shipments of the ICAPS division, the company is optimistic about revenue and gross profit margin. and earnings per share forecasts were both higher than market expectations. However, this was partially offset by the slowdown in spending in the Chinese market.
The report predicts that Applied Materials\’ momentum in the current fiscal quarter ending at the end of July will expand into the second half of this year and continue into 2025.
Overall, the report predicts that the company will be in a favorable position for many technological innovations in the future. It is expected to continue to outperform in the semiconductor wafer fab equipment (WFE) market in the next few years. The target price is raised from US$230 to US$240. The rating is Overweight.

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