Does Applied Materials Stock Deserve Its Epic Rally? - Forbes

Applied Materials (AMAT), a leading global semiconductor equipment manufacturer, has garnered significant attention amid the AI boom. Despite its critical role in AI chip fabrication, it often remains... Read original →

Applied Materials’ stock surge reflects the structural escalation in AI hardware complexity, not speculative froth. As logic nodes shrink below 2nm, Gate-All-Around and backside power delivery dramatically increase equipment content—AMAT dominates critical deposition and etch steps. In HBM4, with stacks exceeding 12 layers, its tools capture over half the equipment value. U.S. export controls paradoxically boost near-term orders from Taiwan, China; Korea; and U.S. fabs rushing to de-risk supply chains, though overcapacity looms. Facing Lam Research and Tokyo Electron’s advances in atomic-scale processing, AMAT is fortifying its edge via Integrated Materials Solutions. Over the next 18 months, chiplet-based AI designs will ignite demand for hybrid bonding and advanced packaging tools—a second growth vector—but the current 37x forward P/E already prices in aggressive adoption, leaving little margin for execution slippage.