Merck Stock: AI Chip Demand Boosts Profits Amid Forecast Adjustment

Merck KGaA has revised its 2024 revenue expectations downward, now projecting figures in the lower half of the initial €20.7-22.1 billion range. This adjustment comes despite the company benefiting from increased demand for semiconductor materials used in AI applications. The German pharmaceutical and technology giant cited a slower-than-anticipated recovery in the broader semiconductor market as the primary reason for the forecast modification. Nevertheless, Merck's third-quarter results showed promise, with revenue climbing 1.8% to €5.3 billion and adjusted operating profit surging 12% to €1.6 billion.

Mixed Performance Across Divisions

The company's performance varied across its business segments. The pharmaceutical division saw growth driven by multiple sclerosis and cancer treatments, while the laboratory sector rebounded after a period of weakness. The electronics unit capitalized on strong demand for AI chip materials but faced challenges in project business and color pigments. Despite these mixed results, Merck managed to increase its after-tax profit by nearly 10% to €812 million. However, the stock market reacted cautiously to these developments, with Merck's share price experiencing downward pressure as analysts described the quarterly results as mixed.