Applied Materials shares are down on guidance and margin concerns. Analysts call it time to buy.

Applied Materials' shares took a hit after the company issued guidance that fell short of expectations, sparking concerns about margins. Despite this, analysts are viewing the dip as a buying opportunity, citing the company's strong position in the semiconductor industry. As the demand for advanced chips continues to surge, driven in part by the rapidly evolving artificial-intelligence landscape, Applied Materials is well-placed to benefit.

The AI industry's insatiable appetite for high-performance chips is a key growth driver for Applied Materials, which supplies critical equipment to semiconductor manufacturers. As major tech players intensify their AI capabilities, the need for advanced chip-making technology will only escalate. This should, in theory, underpin Applied Materials' growth trajectory, even if short-term margin concerns persist. The company's fundamentals remain solid, and its role in enabling the production of cutting-edge chips positions it for long-term success.

Looking ahead, investors will be monitoring Applied Materials' progress in navigating the challenges that have led to the recent guidance cut. Key indicators to watch include the company's ability to maintain its pricing power, manage costs, and capitalize on emerging trends in the semiconductor space. Additionally, updates on its order backlog and the pace of adoption of new technologies will provide valuable insights into the company's growth prospects and potential for margin expansion.

Originally reported by marketwatch.com. CurrencyNews adds analysis for finance & markets readers.