DuPont shares jumped Tuesday on better-than-expected earnings and revenue — boosted, in part, by the company’s exposure to the fast-growing artificial intelligence semiconductor market. The stock has tested our patience, but quarters like this demonstrate why we have stayed invested through the doldrums. Fourth-quarter net sales rose 6.7% year over year to $3.09 billion, topping estimates of $3.07 billion, according to LSEG. Adjusted earnings per share (EPS) totaled $1.13, well ahead of the 98-cent consensus, LSEG data showed. On an annual basis, adjusted EPS rose 29.9%, its best quarterly growth rate since the third quarter of 2021. DD 1Y mountain DuPont 1 year Shares of DuPont rose about 7% Tuesday, to nearly $82 apiece, an encouraging reaction by the market after a bruising few months for the stock that began just days after its upbeat third-quarter earnings report in early November. Between Nov. 7 and Monday’s close, the stock fell 12%, compared with a 1.6% gain for the S & P 500 . It also underperformed the S & P 500’s materials sector , which lost 7% in that same timeframe. Bottom line DuPont delivered strong quarterly results and additional evidence that its electronics spin-off planned for later this year is a smart move for investors. We’re reiterating our buy-equivalent 1 rating and Club price target of $100 a share. The positive market reaction Tuesday echoes what we saw in response to third-quarter results in November. We’re hopeful that, unlike last time, the share-price gains do not prove short-lived. The breakup into two standalone companies is now less than 10 months away, giving us reason to believe DuPont stock may soon be able to emerge from “spin purgatory” — basically, investors waiting on the sidelines until the catalyst comes closer into view — and mount a more durable move higher. DuPont Why we own it: The specialty chemical maker represents an industrial way to play the recovery in the semiconductor and electronics industries, which have strong multiyear outlooks due to advancements in artificial intelligence. The company also is getting past excess inventory issues in a few business lines. DuPont’s plan to break itself up has sweetened the fundamental investment case, even though the stock’s performance has not reflected it just yet. Competitors: 3M , PPG Industries Portfolio weighting: 2.99% Most recent buy: Nov. 19, 2024 Initiated: Aug. 7, 2023 DuPont’s improving underlying fundamentals offer plenty to like, as the fourth quarter showed. In addition to beats on the top and bottom lines, DuPont’s operating earnings before interest, taxes, depreciation, and amortization (EBITDA) of $807 million exceeded analyst estimates, as did its EBITDA margin of 26.1%. As the chart below shows, DuPont’s two core business segments — “electronics and industrial” and “water and protection” — also surpassed expectations on revenue, operating EBITDA and EBITDA margin. The electronics-and-industrial unit saw organic growth of 10%, while the water-and-protection business returned to organic growth for the first time since the second quarter of 2023. DuPont’s much smaller third segment, known as “corporate and other,” isn’t much of a focus for investors, as it includes retained businesses from the previous divestiture of DuPont’s mobility-and-materials operations. DuPont’s electronics business in the fourth quarter continued to benefit from the growing need for artificial intelligence chips and a broader recovery in semiconductor demand, including in China. DuPont makes materials and products used in the fabrication and packaging of semiconductors. Executives said on the post-earnings call that DuPont’s AI-related sales were up roughly 30% in 2024, totaling more than $300 million. “We continue to expect that to be a key piece of growth for the [soon-to-be-standalone electronics company] as we move to separate them towards the end of the year,” CEO Lori Koch said. DuPont expects the spin-off to be completed by Nov. 1, sooner than initially projected when the plans were announced in late May 2024 . The company has changed its separation plans in even more notable ways, disclosing last month that it now intends to keep its water business — home to filtration and purification products for residential, municipal and industrial use — as part of the “remaining” DuPont instead of turning it into its own company like with electronics. At the time, we cheered that decision, knowing that water is an increasingly attractive investment area . Along with water, the remaining DuPont will consist of health care, advanced mobility, and safety and production businesses. In the fourth quarter, DuPont’s water business saw low-double-digits growth as volumes improved. The company’s products used in the health-care and biopharmaceutical markets also were bright spots. Among the weaker parts of the report was DuPont’s shelter business, which makes products such as Tyvek wrapping used in both residential and commercial construction jobs. That chunk of DuPont’s business was flat in the quarter. Put it all together, and DuPont’s fundamentals are improving at the same time a key catalyst that should excite investors is getting closer to happening. As disappointing as DuPont’s stock performance has been at times, all the reasons to stay invested are intact. Guidance DuPont offered mixed 2025 first-quarter guidance. Projected net sales of $3.03 billion came in just shy of the $3.05 billion estimate, according to LSEG, though the guidance factors in a 1.5% headwind tied to foreign exchange rates. On an organic growth basis, DuPont sees first-quarter sales increasing mid-single digits. Adjusted EPS in the January-to-March period is expected to be 95 cents a share, topping the LSEG consensus by a penny. Projected operating EBITDA of $760 million is above the $757.5 million consensus, according to FactSet data. DuPont’s full-year 2025 guidance was roughly in line with expectations. It expects sales in the range of $12.8 billion to $12.9 billion with adjusted EPS in the range of $4.30 to $4.40. That guidance bakes in a roughly 1% headwind tied to foreign exchange. It also assumes organic growth in the mid-single digits. Operating EBITDA, meanwhile, is projected in the range of $3.325 billion to $3.375 billion. (Jim Cramer’s Charitable Trust is long DD. See here for a full list of the stocks.) 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DuPont shares jumped Tuesday on better-than-expected earnings and revenue — boosted, in part, by the company’s exposure to the fast-growing artificial intelligence semiconductor market. The stock has tested our patience, but quarters like this demonstrate why we have stayed invested through the doldrums.