(Bloomberg) -- Applied Materials Inc. delivered an estimate-beating forecast that still got a lukewarm reaction from investors, a sign of the lofty hopes surrounding a company that's key to the AI boom.
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Revenue will be approximately $10.3 billion in the fiscal fourth quarter, which runs through October, Applied Materials said in a statement Thursday. Though analysts estimated $9.62 billion on average, some projections were closer to $10 billion, according to data compiled by Bloomberg.
Investors have embraced Applied Materials this year, betting that it will be a key winner in the AI economy. The company is the biggest US maker of chip equipment, making it central to a surge in demand for semiconductors. But after a rally that more than doubled the stock price, it's now harder for Applied Materials to meet expectations.
The shares fell about 3% in late trading after the results were released.
Last month, Applied Materials rival KLA Corp. also suffered a stock decline in the wake of its results. The results generally met analysts' estimates, but missed on free cash flow.
Applied Materials is a barometer for chip-industry health because semiconductor makers buy its gear when they need to ramp up production. As the industry confronts shortages of memory chips and other components, Applied Materials customers such as SK Hynix Inc. and Micron Technology Inc. are racing to build new manufacturing facilities.
Applied Materials, based in Santa Clara, California, makes tools used for dynamic random access memory, or DRAM. That's the key component in the high-bandwidth memory used by AI accelerators, the chips from Nvidia Corp. and others that help train artificial intelligence software.
Earnings will be $4.02 a share in the fourth quarter, excluding some items, the company said. That compared with a projection of $3.72.
Sales rose 25% to $9.12 billion in the third quarter, which ended July 26. Earnings increased to $3.50 a share, excluding certain items. Analysts had projected revenue of $9 billion and profit of $3.42 a share.
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