Applied Materials Excited About Long-Term WFE Prospects

Applied Materials' (NASDAQ:AMAT) business strategy that enables major technological inflections for customers has earned it the top spot in many of its markets served, resulting in increased sales and EPS since 2013. With that, management has set lofty targets to reach by 2018, including EPS of 2.00, though we think that may be stretching it a bit. Applied is currently working through what it sees as the second phase of WFE drivers in mobile and social media. While it expects such macro trends to provide solid growth, even more robust proliferation of its chips is expected to come with the next wave of visual computing and artificial intelligence. Applications include virtual/augmented reality, the Internet of Things, big data, artificial intelligence, smart vehicles, and additive manufacturing.