What is the market’s expectation for Applied Materials’ revenue and earnings versus the company’s forecast?

Market vs Company Outlook

The consensus Wall Street forecast for Q2 2024 had Applied Materials (AMAT) projecting revenues of roughly $6.0‑$6.2 billion and EPS of $2.40‑$2.55. Prior to the release, analysts were penciling in about $6.3 billion of sales and $2.70 of EPS, meaning the company’s guidance is already 10‑15 % below the street’s original expectations. The market’s immediate reaction—a 10 % slide in after‑hours trading—signals that investors now anticipate the quarter will under‑perform both the consensus estimate and the company’s own guidance, with earnings likely to come in at the low‑end of the range or even miss it entirely.

Trading Implications

Technically, AMAT broke a short‑term support line near $115 and is now testing the 20‑day moving average around $125, with bearish momentum indicated by a widening ATR and a sub‑50 RSI. Unless the company upgrades its outlook or macro‑level semiconductor demand rebounds, the downside risk extends to the $110‑$105 zone, making short‑term bearish positions (e.g., put spreads or short shares) attractive for risk‑averse traders. Conversely, a bounce off the 20‑day MA could provide a buying opportunity with a tight stop just below $120, targeting a retest of the prior resistance at $135. Keep an eye on any post‑earnings commentary that might soften the macro‑uncertainty narrative, as that could quickly flip sentiment.