APPLIED MATERIALS INC (AMAT)

Applied Materials Inc is a leading company that makes the high-tech machines needed to create computer chips and advanced screens. These chips and displays are found in almost everything we use-like smartphones, laptops, cars, AI systems, data centers, and smart home devices.

They design, build, and maintain specialized equipment that helps manufactures produce these essential components. Because making chips and displays is becoming more complicated, Applied Materials offers a wide range of tools that work together to help companies make better products more efficiently.

Semiconductors (computer chips) are at the heart of modern technology, powering innovations like artificial intelligence, self-driving cars, smart devices, and clean energy solutions. Applied Materials plays a key role in shaping the future of technology by enabling the production of these critical components.

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Financial Snapshot

Income Statement (*values displayed in millions)

How do they make money?

Semiconductor Systems: AMAT sells high-tech machines that chip manufacturers (like Intel, TSMC, and Samsung) use to build semiconductors. These machines are essential for creating smaller, faster, and more efficient chips used in everything from smartphones to AI servers. The majority of AMAT’s revenue comes from this segment.

Applied Global Services: AMAT provides maintenance, spare parts, upgrades, and consulting services to keep them running efficiently. Customers pay ongoing fees for maintenance contracts and software upgrades, ensuring a steady revenue stream. This is AMAT’s second largest revenue source.

Display and Adjacent Markets: AMAT provides equipment for making OLED and LCD screens used in TVs, smartphones, and tablets. Companies like Samsung and LG buy this machinery to produce high-resolution displays.

Good Time to Buy?

At the time of writing, AMAT is down 32% since its July 2024 52 Week High of 255.89/share. This is a great deal to us! This company plays an essential part in the semiconductor industry. Looking at their income statement, they are experiencing consistent growth in both revenue and net income year after year.

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