Applied Materials delivered a better-than-expected second quarter, but the market responded negatively amid growing concerns about future demand visibility—particularly in China. Management attributed quarterly strength to robust demand for semiconductor systems and services, with CEO Gary Dickerson highlighting "record performance" driven by investments in advanced chip manufacturing and ongoing customer engagement. However, management was clear that the positive results were partly offset by uneven demand patterns and mounting external uncertainty, especially around Chinese capacity digestion and the impact of export license restrictions.

Is now the time to buy AMAT? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Applied Materials’s Q2 Earnings Call

• James Edward Schneider (Goldman Sachs) asked if China demand softness and export license uncertainty could persist into 2026 and how long advanced logic weakness might last. CFO Brice Hill explained the company expects lower China business for several more quarters and that leading-edge demand will likely remain uneven due to customer timing.
• Stacy Aaron Rasgon (Bernstein Research) probed whether China outperformed internal expectations and if non-China markets were correspondingly weaker. Hill clarified that China performance was as anticipated and that softer leading-edge logic demand was the main driver behind the quarterly guide.
• Vivek Arya (Bank of America Securities) questioned whether strong DRAM growth could offset weakness in China and advanced logic. Hill responded that DRAM demand is robust and may set a record, but China will remain a headwind and the balance between segments will determine overall growth.
• Harlan L. Sur (JPMorgan) inquired about growth prospects for advanced packaging amid weaker logic spending. CEO Gary Dickerson reiterated the company’s high visibility and market share in packaging, forecasting the business to more than double within a few years.
• Christopher James Muse (Cantor Fitzgerald) asked about the drivers behind the Q4 China revenue decline and leading-edge order timing. Hill indicated that both were primarily due to customer investment schedules and regulatory uncertainties, rather than fundamental shifts in market demand.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will be monitoring (1) the trajectory of China-related equipment sales and progress on pending export license approvals, (2) the timing and scale of major customer investments in new logic and memory production nodes, and (3) developments in advanced packaging and AI-enabling product launches. Execution in these areas will be key to sustaining growth during a period of heightened industry and policy uncertainty.

Applied Materials currently trades at $161.20, down from $188.16 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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