Shares of Applied Materials, Inc. (AMAT Quick QuoteAMAT - Free Report) hit a new 52-week high of $36.93 on Mar 2, eventually closing at $36.85. The stock returned 89.5% in the last one-year period and has added approximately 14.2% year to date.

Also, the company’s shares outperformed the Zacks Semiconductor Equipment - Wafer Fabrication industry in the last one year. While the stock returned 89.12%, the industry gained 52.06%. Average volume of shares traded in the last three months was roughly 9,862K.

What is Driving Applied Materials?

Applied Materials is one of the world’s biggest suppliers of fabrication equipment to semiconductor, LCD and solar PV cell manufacturers. Strength in sales in mobility platforms, as well as in TV capacity builds, with better utilization of resources and increased WFE spending are the major positives for the company.

The price appreciation can be attributed to Applied Materials’ strong fundamentals and better-than-expected first-quarter fiscal 2017 results reported on Feb 15. In response to its strong earnings, the stock has gained 3.8%.

In the fiscal first quarter, Applied Materials reported earnings of 67 cents per share, surpassing the Zacks Consensus Estimate by a penny. Though revenues marginally missed the Zacks Consensus Estimate, it increased 45.2% year over year. In fact, the company’s orders and earnings were at an all-time high.

The major products that are helping the company’s growth are global demand of 3-D NAND flash memory chips and advanced organic light-emitting diode (OLED). The memory chips are used in a broad range of electronics such as laptops and mobile devices. OLED is considered a popular option for premium smartphones since Apple Inc. (AAPL) adopted them for the iPhone that’s scheduled for release later this year.

Also, Applied Materials remains strongly positioned in China where it continues to see strong growth in semiconductor orders. Growing investments from Chinese domestic manufacturers have been the main catalysts.

Applied Materials also provided strong guidance for the second quarter of fiscal 2017. Revenues are expected between $3.45 and $3.60 billion, up 44% growth year over year at the midpoint. Non-GAAP EPS is expected to come in the range of 72–80 cents, in line with the consensus mark of 76 cents.

Also, Applied Materials has an impressive record of returning cash to shareholders through share buybacks and regular dividends payouts. In the first quarter, the company returned $238 million through stock repurchases and cash dividends to shareholders.

Additionally, Applied Materials delivered an average positive earnings surprise of nearly 3.92% over the trailing four quarters. The Zacks Rank #1 (Strong Buy) company’s undisputed, strong market position in China, proliferation in display, continued innovation and strong long-term growth potential, position it well.

Applied Materials, Inc. Price and Consensus

 

Applied Materials, Inc. Price and Consensus | Applied Materials, Inc. Quote

Stocks worth considering in the industry include Texas Instruments (TXN Quick QuoteTXN - Free Report) , sporting a Zacks Rank #1 and Xcerra Corporation and Internap Corporation , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Texas Instruments delivered a positive earnings surprise of 7.09%, on average, in the trailing four quarters.

Xcerra Corporation delivered a positive earnings surprise of 187.5%, on average, in the trailing four quarters.

Internap Corporation delivered a positive earnings surprise of 4.56%, on average, in the trailing four quarters.

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