By Senad Karaahmetovic

Pre-open Friday saw shares of Applied Materials fall by over 1% after it delivered disappointing results.

AMAT’s $1.85 revenue was below the consensus estimate of $1.91. Again, revenue was $6.25billion lower than what had been expected at $6.36billion. The adjusted gross margin of 47% was lower than the expected 46.7%, and is much higher than the 47.7% estimate.

The company expects an adjusted EPS between $1.59 and $1.95 for this quarter. This is lower than the $2.05. estimate. Net sales are seen between $5.85 billion and $6.65 billion, “which includes the expected impact of ongoing supply chain challenges.”

Patrick Ho, Stifel Analyst commented:

“Demand trends remain healthy, and the company’s visibility now extends well into 2023 and even 2024. In fact, management noted that it expects equipment spending to be “higher” in 2023 versus 2022. Overall, although we think the supply chain/COVID problem will persist, overall demand has not slowed down and we don’t expect it to slow. Our long-term thesis also remains intact.”

Mizuho analyst Vijay Rakesh cut the price target to $160.00 per share from $180.00 but continues “to see AMAT well positioned with a strong product roadmap and market leadership despite near-term headwinds.”