Applied Materials forecast current-quarter revenue and profit far above analysts' estimates as the company benefits from demand for newer technology to make displays and smartphone memory chips.
Shares of the world's largest supplier of tools used to make semiconductors rose 5.7 percent to $29.25 in after-hours trading on Thursday. On Friday, the stock hit a 15-year high in intraday trading and ended the day about 7 percent higher.
The rising popularity of mobile devices has fueled demand and investments in 3D NAND memory chips, which can store data without using up power.
"We are in the best position as the market goes forward in ramping 3D NAND," Chief Executive Gary Dickerson said in an interview.
Orders in its semiconductor systems business, Applied Materials's biggest, rose 10.4 percent in the third quarter ended July 31.
Applied Materials is considered an bellwether and its results are seen as an indicator for the overall chip industry.
The company has also gained from growing demand for displays using organic light-emitting diode (OLED) technology, where its products help manufacture displays used in televisions, phones and computer screens.
Orders in the business surged 153 percent to $803 million in the latest quarter.
Applied Materials said it expected an adjusted profit of 61 to 69 cents per share for the fourth quarter and net sales to rise 15 to 19 percent from the third quarter, implying sales of $3.24 billion to $3.36 billion.
Analysts on average were expecting a profit of 48 cents and revenue of $2.87 billion, according to Thomson Reuters.
Applied Materials' net sales rose 13.3 percent to $2.82 billion in the third quarter.
The company's net income rose to $505 million, or 46 cents per share, from $329 million, or 27 cents per share, a year earlier.
Excluding items, the company earned 50 cents per share.
Analysts on average had expected a profit of 48 cents per share and revenue of $2.84 billion.
Up to Thursday's close, the company's stock had gained about 48 percent this year.
— CNBC.com contributed to this report.