Chipmaker Applied Materials Inc. has been one of the key stocks to benefit from the surge in the demand for AI this year, an analyst at TickMill Group said.
“The company recently posted bumper 4Q earnings with both EPS and revenues coming in above target and cited the growth in demand from companies looking to scale up their AI business as a key driver of success,” TickMill market analysts James Harte said.
“Looking ahead, with AI set to continue to grow in terms of a spending focus for tech business, AM looks poised for further upside in the near-term.”
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Harte noted that the rebound of business activity in China on the back of the reopening of its borders was also an encouraging sign.
“With plenty of demand set to come from China as the economic recovery continues there, chipmakers such as AM look set to benefit greatly from increased demand from the Chinese semiconductor market,” he said.
Further, Applied Materials is set to enjoy a surge in demand after announcing a new chipmaking system that lowers the cost of etching transistors into semiconductors, Harte pointed out.
“This allows the company to make high-performing transistors at a lower cost for makers of semiconductors, giving it a clear competitive advantage over its rivals,” he said.
Applied Materials shares were up 0.2% at US$118.69 in pre-market trading on Friday.
Contact the author at emily.jarvie@proactiveinvestors.com
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