Image source: Applied Materials.

What: Shares of semiconductor equipment giant Applied Materials (NASDAQ:AMAT) soared 19.3% in May, according to data provided by S&P Global Market Intelligence. The company's fiscal second-quarter earnings report beat analyst estimates on all fronts, and order growth was strong.

So what: Applied Materials reported quarterly revenue of $2.45 billion, roughly flat year over year and slightly above analyst expectations. Orders surged 37% year over year, driven mainly by growth in the company's display business. The display segment received $700 million of new orders during the quarter, up from just $120 million during the prior-year period. New orders for equipment related to flash memory also surged, counteracting a steep decline in DRAM equipment orders.

Earnings also came in above analyst estimates, with Applied Materials reporting non-GAAP EPS of $0.34, up from $0.29 during the same period last year. Analysts were expecting earnings of $0.32 per share. Applied Materials' earnings growth was driven by a drop in operating expenses, with general and administrative costs falling by 35% year over year.

Applied Materials CEO Gary Dickerson summed up the quarter: "In our second quarter we booked our highest orders in 15 years and we expect to deliver record earnings in fiscal 2016. We are making significant progress with our strategy in semiconductor, display and service, and have a great pipeline of differentiated products that will fuel future growth."

Now what: Strong order growth for Applied Materials led the company to issue guidance that was well ahead of analyst expectations. The company expects revenue in the third quarter to grow by 14% to 18% sequentially, compared to analyst estimates calling for just 2% growth. The company expects non-GAAP EPS between $0.46 and $0.50 in the third quarter, above the $0.36 analysts were expecting.

Applied Materials operates in a cyclical industry, and it's important to remember that orders can both surge and dry up without much warning. For now, investors are pushing the stock higher on solid results and extremely strong order growth.

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