Applied Materials Inc. (NASDAQ:AMAT), the leading U.S. manufacturer of chip-manufacturing equipment, recently announced a fiscal fourth-quarter sales forecast of approximately $6.93 billion. This projection aligns with the average analyst estimate but failed to meet investor expectations, who had anticipated a larger boost from increased artificial intelligence spending. The company’s anticipated profit, excluding certain items, is around $2.18 per share, slightly above the $2.15 per share forecast by analysts for the period ending in October.

Stock Performance and Market Reactions

Shares of Applied Materials Inc. fell by 3.8% at 9:30 a.m. on Friday following the announcement. Despite its role as a critical supplier to major chipmakers, including Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Samsung Electronics Co., Ltd. (KRX:005930), and Intel Corporation (NASDAQ:INTC), the company’s forecast did not meet investor hopes. The demand for high-end processor equipment, essential for AI software development, remains robust. However, Applied Materials has experienced mixed performance in different business sectors.

Mixed Business Performance and Future Outlook

The company’s third-quarter profit was $2.12 per share on revenue of $6.78 billion, surpassing analysts’ estimates of $2.03 per share on $6.68 billion in sales. Despite this, segments, such as ICAPS (chip equipment for internet-connected appliances, communications, automotive, power control, and sensors), have shown slower growth. Companies like NXP Semiconductors N.V. (NASDAQ:NXPI) have reported weaker orders from automotive clients. Nevertheless, Applied Materials remains optimistic about long-term demand for ICAPS chips.

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