© Reuters. FILE PHOTO: A smartphone with a displayed Utilized Supplies brand is positioned on a pc motherboard on this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photograph
(Reuters) – Utilized Supplies (NASDAQ:) shares rose 13% in premarket buying and selling on Friday after the semiconductor tools provider forecast a better-than-expected second quarter on robust demand from clients seeking to make AI-enabled chips.
The outlook was additionally supported by enchancment in sure electronics end-markets like smartphones and private computer systems, and analysts highlighted a diversified portfolio that units up the corporate for additional features.
“Utilized is well-positioned to profit from a number of upcoming expertise inflections that ought to drive outperformance vs WFE (wafer fab tools) over the subsequent a number of years,” mentioned analysts at J.P. Morgan.
Utilized Supplies forecast second-quarter income of $6.5 billion, plus or minus $400 million, and adjusted revenue per share of $1.79 to $2.15 or the quarter ending April, above market expectations.
It additionally topped expectation for first-quarter income.
The corporate’s inventory was buying and selling at $212 and on observe to hit a contemporary file excessive on Friday, if premarket features maintain. Shares have gained near 16% this yr, as of Thursday shut.
“Administration famous restoration in utilization throughout forefront logic and reminiscence clients which will increase our confidence in “V” formed restoration,” mentioned analysts at Jefferies.
Utilized Supplies, which provides to Intel (NASDAQ:) and Samsung (KS:) amongst others, expects high-bandwidth reminiscence (HBM) packaging revenues to be 4 occasions bigger than final yr.
HBM packaging makes use of a particular stacking association of reminiscence chips for higher efficiency and is appropriate for high-performance computing.
At the very least 4 analysts raised their rankings and eight bumped up their worth targets, in response to LSEG information.
At present, the inventory is valued at 22.77 occasions its one-year ahead earnings, in contrast with the business common of 25.17.