03:19 PM EDT, 05/06/2024 (MT Newswires) -- Applied Materials ( AMAT ) is likely to revise fiscal Q3 guidance upward as China continues to buy equipment "as fast as it can," UBS Securities said Monday in a preview before fiscal Q2 results.

UBS, which expects fiscal Q2 results to top the midpoint of guidance, said China will likely make up more than 40% of the company's overall mix in business until the US finalizes which factories to bar from receiving tech for producing advanced chips.

Following the US decision, China's contribution to semiconductor systems group revenue probably will drop 10% and return to normalized levels of 30% through fiscal 2024.

"Barring this, we would expect [fiscal Q3] to be biased higher as China remains stronger for longer," UBS said.

UBS maintained its neutral rating on the stock and kept its $235 price target.

Shares of Applied Materials ( AMAT ) rose 2% in recent trading Monday. Results from Q2 are expected May 16.

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