By Reuters

(Reuters) - Applied Materials' (AMAT) shares jumped 11.7% in premarket trading on Friday as investors bet that surging AI demand and ‌a tightening memory market will continue to drive orders for the ‌company's chipmaking tools, after it forecast second-quarter revenue and profit above Wall Street estimates.

The largest ​U.S. semiconductor equipment maker is positioned to capitalize on robust AI chip demand, which is consuming global memory supplies and driving chipmakers to expand capacity, a trend analysts say could support multi-year growth.

The Santa Clara, California-based company projected ‌second-quarter revenue of about $7.65 billion, ⁠plus or minus $500 million, above analysts' average estimate of $7.01 billion, according to LSEG data.

It forecast adjusted profit of $2.64 per ⁠share, compared with estimates of $2.28.

Applied Materials CEO Gary Dickerson said the quarter was "fueled by the acceleration of industry investments in AI computing," adding that AI workloads ​were driving ​demand for higher-performance, more energy efficient ​chips across leading‑edge logic, high‑bandwidth ‌memory and advanced packaging.

The surge comes as AI data center expansion from hyperscalers and rising demand for high-bandwidth memory are tightening chip supply chains and driving fresh spending on wafer-fab and packaging equipment.

In December, industry group SEMI forecast sales of equipment used to make computer chip wafers will rise about ‌9% to $126 billion in 2026 and a ​further 7.3% to $135 billion in 2027.

"AMAT has ​a leadership position in DRAM/HBM, ​Advanced Logic, and Packaging and is benefiting from strong GenAI-driven ‌spending," RBC analysts said.

Applied Materials' forecast ​lifted other chip-equipment ​stocks. The outlook pushed shares of ASML (ASML), the world's biggest supplier of chip equipment, up 1.8%. U.S. peers Lam Research (LRCX) climbed 2%, while ​KLA (KLAC) gained more than ‌1% in thin volumes.

Applied Materials shares are up about 28% ​year-to-date, outperforming the Philadelphia Semiconductor index's 14% gain.

(Reporting by Rashika Singh ​in Bengaluru; Editing by Tasim Zahid)

This week on Reuters

• Telegram messaging app faces fines in Russia, state media report

• How investors buy gold and what fuels the market

• India's Titan posts quarterly profit jump on high gold prices

• Foreign investors pull from Asian stocks as AI-driven tech rout spreads