**Applied Materials Stock Climbs 3% After Beating Q4 Earnings Estimates, Boosted by AI Demand**

Shares of Applied Materials surged by 3% following the release of its fourth-quarter earnings, which surpassed market expectations. The American chip manufacturer reported adjusted earnings of $2.32 per share from sales totaling $7.05 billion. These numbers exceeded predictions, which had forecasted adjusted earnings of $2.19 per share on $6.96 billion in sales. The upbeat performance was largely driven by the escalating demand for AI-related chip production.

However, there were mixed signals as the company issued a cautious forecast for the current quarter. Applied Materials projected revenues slightly below $7.15 billion, which is lower than the Wall Street estimate of $7.24 billion. On a more optimistic note, the company anticipated earnings per share of $2.29 for the upcoming quarter, marginally higher than the Street's forecast of $2.27 per share.

Gary Dickerson, Chief Executive Officer, emphasized Applied Materials' leadership in facilitating advancements in semiconductor technology, particularly in AI and energy-efficient computing—crucial areas for the company's material engineering capabilities. Nevertheless, the company faces challenges, notably in China. Once a high-growth market with a 400% year-over-year increase, revenues from China have plummeted by 28%. This decline is largely attributed to U.S. restrictions on exporting high-tech equipment to Chinese clients, despite the growth of China's fabless chip makers.

Adding to investor concerns are ongoing investigations by the U.S. government to ensure compliance with these export restrictions. Given that Applied Materials directly supplies industry giants like Intel and TSMC, its operating results are seen as a bellwether for broader chip market trends. Consequently, the company's cautious outlook has garnered considerable attention and scrutiny.