Applied Materials forecasts third-quarter results above Wall Street estimates due to rising demand for AI chips, high-performance computing, and data centers.

CEO Gary Dickerson highlights strong performance driven by increasing demand for both traditional and new high-performance chips.

CFO Brice Hill reports Q2 results showing slight growth in net sales and increases in non-GAAP gross margin, operating cash flow, and free cash flow.

Capital allocation strategy focuses on R&D investment, growing dividends, and buyback programs to distribute excess free cash flow to shareholders.

Expected third-quarter revenue is about $6.65 billion with an adjusted profit per share between $1.83 and $2.19.

Outlook for 2025 includes significant growth in gate-all-around technology, advanced packaging, HBM memory, and ICAPS.

Investments in materials engineering are anticipated to add value and result in higher profitability.

Tech giants such as Google, Amazon, Microsoft, and Facebook are boosting data center spending to support growing AI services demand.

Semiconductor sector was the best performer in Q1 2024, and the AI-driven cycle is expected to be durable.

Despite tech bubble speculations, the AI economy is projected to sustain a massive wave of capital investment.

Economic outlook remains positive with GDP growth and a strong job market, though inflation is high.

Recommendation to be selective with investments, focusing on AI-exposed technology and semiconductor companies, as well as resilient businesses.

Emphasis on being dynamic and evolving to adapt to revolutionary changes like accelerated computing.