Applied Materials, Inc. (NASDAQ:AMAT) stock rose 0.12% (As on May 17, 11:11:14 AM UTC-4, Source: Google Finance) after the company forecast third-quarter results largely above Wall Street estimates, indicating robust demand fueled by an artificial intelligence boom. The company has benefited from growing demand for wafer fabrication equipment, which are sophisticated and expensive machinery to make semiconductors, as its customers are investing heavily to produce AI chips. Sales in China more than doubled to $2.83B in Q2 from $1.41B in the same period a year earlier, while sales fell in the United States to $853M from $1.11B a year earlier. China continues to be the company’s largest geographic market, making up 43% of sales in Q2. Adjusted gross margin rose to 47.5% during the period from 46.8% a year earlier. On a non-GAAP basis, the company reported operating income of $1.93 billion or 29.0 percent of net revenue. The company said it generated $1.39 billion in cash from operations during the quarter and distributed $1.09 billion to shareholders, including $820 million in share repurchases and $266 million in dividends.

Further, a surge in the requirement of high-performance computing and data centers has also driven demand for memory semiconductors such as dynamic random access memory (DRAM) and flash memory, helping chip tools suppliers. DRAM equipment sales accounted for 32% of the company’s semiconductor system sales in the period, up from 11% in the year-earlier period. End markets are mixed with weak industrial and auto markets, but strong image sensors, power chips, microcontrollers and other markets. Meanwhile, Applied Materials Inc.’s venture capital arm Applied Ventures LLC is investing in VVDN Technologies, one of the leading India-based electronics product design, software, and manufacturing companies. The strategic growth funding from Applied Ventures can enable VVDN to expand the R&D of next-generation semiconductor technologies as well as electronic products and solutions.

AMAT in the second quarter of FY 24 has reported the adjusted earnings per share $2.09, beating the analysts’ estimates for the adjusted earnings per share of $1.99. The company had reported flat adjusted revenue growth to $6.65 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue of $6.54 billion.

Applied Materials expects third-quarter revenue of about $6.65 billion, plus or minus $400 million, compared with analysts’ estimates of $6.58 billion, according to LSEG data. The company forecast third-quarter adjusted profit per share to be between $1.83 and $2.19, compared with estimates of $1.98.