May 16 (Reuters) - Applied Materials forecast third-quarter results above Wall Street estimates on Thursday, following strong demand for its semiconductor tools, but failed to meet lofty investor expectations.

The company's shares, which have rallied about 32% so far this year, fell about 1.2% in extended trading.

Applied Materials has benefited from growing demand for wafer fabrication equipment, which are sophisticated and expensive machinery to make semiconductors, as its customers are investing heavily to produce artificial intelligence chips.

"Investors are nudging the share price down because they were looking for a more solid beat and outlook," Michael Ashley Schulman, chief investment officer at Running Point Capital said, adding that the results do not knock "the wind out of a semiconductor chip recovery theme."

A surge in the requirement of high-performance computing and data centers has also driven demand for memory semiconductors such as dynamic random access memory (DRAM) and flash memory, helping chip tools suppliers.

Applied Materials forecast third-quarter revenue of about $6.65 billion, plus or minus $400 million, compared with analysts' estimates of $6.58 billion, according to LSEG data.

The company expects third-quarter adjusted profit per share between $1.83 and $2.19, compared with estimates of $1.98.

Applied Materials, which supplies chipmaking tools to Samsung Electronics and Taiwan Semiconductor Manufacturing Co, reported that 43% of its total revenue came from China in the second quarter.

End markets are mixed with weak industrial and auto markets, but strong image sensors, power chips, microcontrollers and other markets, Applied Materials Chief Financial Officer Brice Hill said on a post-earnings call.

The company, which is the largest semiconductor equipment maker in the United States, reported second-quarter revenue of $6.65 billion, beating estimates of $6.54 billion.

On an adjusted basis, Applied Materials earned $2.09 per share, compared with estimates of $1.99. (Reporting by Jaspreet Singh in Bengaluru; Editing by Shounak Dasgupta)