Record Revenue and Strong Growth: Applied Materials reported total net sales of approximately $7.2 billion for fiscal Q1 2025, a 7% year-over-year increase, and achieved non-GAAP earnings per share of $2.38, up 12% year-over-year. The company is experiencing strong demand in the leading-edge semiconductor market, particularly in foundry logic, where a 20% growth has been noted.
Market Dynamics and AI Impact: The global semiconductor market is projected to exceed $1 trillion in annual revenues by 2030, with AI driving a 20% year-over-year growth in semiconductor sales in 2024. Applied is well-positioned for growth in critical areas like leading-edge logic, high-performance DRAM, HBM, and advanced packaging.
China Market Challenges: The company faces headwinds from new trade restrictions impacting its ability to serve the Chinese market, with an estimated $400 million revenue reduction expected for fiscal 2025, leading to a projected lower revenue from China compared to historical norms. China’s contribution to total revenue is anticipated to decline to 5% in Q2, down from the normalized level of 30%.