JPMorgan analyst Harlan Sur is one of many who were impressed by Applied Materials, Inc. AMAT 0.3%’s fiscal Q2 earnings and guidance beats. The stock is up more than 12.8 percent in early Friday trading, but Sur sees plenty of upside left for Applied Materials.

“We remain constructive of Applied’s gross operating margin expansion opportunities on continued share gains, SAM expansion and solid operational execution within a flattish semiconductor spending environment,” Sur explained.

The macro environment is sluggish and DRAM pricing is weak, but Sur thinks Applied Materials can transcend the headwinds and outperform in the market.

It’s Not Just Near-Term Good News…

“Although the team did not provide order guidance for the July quarter, the team sees solid fundamentals in the back half of the year based on its backlog and increased Foundry and Logic spending in 2H16 vs. 1H16,” Sur added.

JPMorgan also believes…

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