Shares of Applied Materials (AMAT) slipped in after-hours trading after the chip company reported earnings for its third quarter of Fiscal Year 2024. Earnings per share came in at $2.12, which beat analysts’ consensus estimate of $2.03 per share. Sales increased by 5.4% year-over-year, with revenue hitting $6.78 billion. This also beat analysts’ expectations of $6.67 billion.
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Looking forward to Q4 2024, management now expects revenue to reach $6.93 billion (plus or minus $400 million) and adjusted earnings per share to be in the range of $2.00 to $2.36. For reference, analysts were expecting $6.92 billion in revenue, along with an adjusted EPS of $2.14. The outlook is underwhelming since it is mostly in line with estimates, which is what likely caused shares to fall.
Hedge Funds Have Been Selling Shares of AMAT
When it comes to “smart money,” money managers don’t seem to be all that confident in AMAT stock. Indeed, after a 51% rally in its share price over the past year, hedge funds have been taking profits during the past three months and decreased their holdings in the stock by 12.8 million shares. As a result, they have a very negative confidence signal, as indicated by the graphic below.
What Is the Target Price for AMAT?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AMAT stock based on 15 Buys, seven Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMAT stock price target of $247 per share implies 18.93% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
