Nasdaq Composite Gains 111% Over Three Years, Driven by AI Adoption
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 25 2026
0mins
Should l Buy AMAT?
Source: Fool
- Nasdaq Outperformance: The Nasdaq Composite has surged 111% over the past three years, significantly outpacing the S&P 500's 74% increase, reflecting robust growth in the tech sector driven by widespread AI adoption, a trend expected to continue into 2026.
- Global AI Spending Surge: According to Gartner, global AI spending is projected to reach $2.5 trillion in 2023, marking a nearly 44% increase from last year, with an anticipated 32% growth in 2027, providing strong growth momentum for tech stocks.
- Positive Outlook for Applied Materials: Shares of Applied Materials (AMAT) have risen 72% in the past six months, fueled by strong demand for AI-specific semiconductor equipment, with semiconductor equipment sales expected to increase from $133 billion to $145 billion in 2026, driving revenue growth.
- SentinelOne Acquisition Boosts Growth: SentinelOne's acquisition of Observo AI for $225 million enhances its real-time threat detection capabilities, with Q3 revenue up 23% year-over-year to $259 million, and expectations for future growth to exceed market forecasts, potentially driving a 48% stock price increase.
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Analyst Views on AMAT
Wall Street analysts forecast AMAT stock price to fall
22 Analyst Rating
18 Buy
4 Hold
0 Sell
Strong Buy
Current: 403.910
Low
190.00
Averages
288.05
High
425.00
Current: 403.910
Low
190.00
Averages
288.05
High
425.00
About AMAT
Applied Materials, Inc. is a materials engineering solution company. The Company provides equipment, services and software to the semiconductor, display, and related industries. It operates through two segments: Semiconductor Systems and Applied Global Services (AGS). The Semiconductor Systems segment includes semiconductor capital equipment to enable materials engineering steps including etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation. The AGS segment provides integrated solutions to optimize equipment and fab performance and productivity, including services, spares and factory automation software for semiconductor and other products. Its products include personal computing devices, mobile phones, artificial intelligence (AI) and data center servers, automobiles, connected devices, industrial applications and consumer electronics.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Applied Materials Schedules Q2 2026 Earnings Call
- Earnings Call Announcement: Applied Materials, Inc. has announced its fiscal Q2 2026 earnings conference call scheduled for May 14, 2026, at 4:30 p.m. ET, aimed at providing investors and analysts with insights into its latest financial performance and business developments.
- Live Webcast and Replay: The call will be webcast live, allowing investors to participate via the company’s website link, with a replay available starting at 8:00 p.m. ET on the same day, ensuring that those unable to attend live can still access the information.
- Company Overview: Applied Materials is a leader in materials engineering solutions, with its technology being foundational to virtually every new semiconductor and advanced display globally, driving advancements in AI and the commercialization of next-generation chips.
- Commitment to Innovation: The company is dedicated to pushing the boundaries of science and engineering to deliver material innovations that change the world, reflecting its significant role in the semiconductor industry and its impact on future technological developments.
See More
Semiconductor Industry Outlook and Investment Recommendations
- Strong Industry Performance: Over the past six months, the semiconductor sector has delivered a remarkable 68.1% return, significantly outperforming the S&P 500's 4.8%, underscoring its critical role in the Information Age, yet future growth requires a cautious approach.
- Skyworks Solutions' Dim Outlook: With a market cap of $9.29 billion, Skyworks has experienced a 6.6% annual sales decline over the past two years, and projected sales are expected to drop by 7.9% in the next 12 months, compounded by an 18.7 percentage point fall in operating margin due to rising expenses, indicating weak market demand.
- Himax Technologies Facing Challenges: Himax, valued at $2.01 billion, has seen a 1.3% annual sales decline over the last five years, and its high net-debt-to-EBITDA ratio of 6× could force it to raise capital under unfavorable conditions, alongside a 29.9 percentage point drop in operating margin, reflecting inadequate cost structure adjustments.
- Applied Materials Worth Watching: With a market cap of $320.2 billion, Applied Materials boasts a healthy operating margin of 28.7%, showcasing efficient management and robust free cash flow, allowing for flexible growth investments or shareholder returns, with a current stock price of $408.35 and a forward P/E ratio of 32.6, indicating strong investment potential.
See More
Tesla to Build Chip Factories in Texas Using Intel's 14A Process
- Terafab Project Overview: Tesla plans to invest approximately $3 billion in the Terafab project in Austin, Texas, aimed at meeting the substantial future chip demand for electric vehicles and humanoid robots, highlighting the company's ambitious vision.
- Chip Production Capacity: The Terafab project is expected to produce one terawatt of computing capacity annually, compared to the current U.S. output of about half a terawatt, showcasing Tesla's aspirations in the chip manufacturing sector.
- Collaboration with Intel: Tesla will utilize Intel's 14A manufacturing process, marking a significant breakthrough for Intel's contract manufacturing business, which could provide robust support for its future market competitiveness.
- Supply Chain Strategy: Tesla has engaged with multiple chip equipment suppliers to seek quotes and delivery timelines, indicating a proactive approach in securing the necessary manufacturing equipment for the Terafab project, ensuring its successful implementation.
See More
U.S. Stocks Rise, Nasdaq Hits Record High
- Nasdaq Hits Record High: The Nasdaq 100 rose by 1.73%, reaching a new record high, reflecting strong investor confidence in tech stocks, particularly driven by robust corporate earnings, which may attract further investment in the tech sector.
- Earnings Beat Expectations: Companies like GE, Boeing, and Masco reported Q1 revenues of $9.34 billion, negative $1.45 billion, and $1.92 billion respectively, all exceeding market expectations, which boosted overall market sentiment and indicated signs of economic recovery.
- Oil Price Surge Affects Markets: WTI crude oil prices rose over 3% due to the blockade of the Strait of Hormuz, potentially exacerbating the global energy crisis and influencing market inflation expectations, thereby affecting investor risk appetite.
- Mortgage Applications Increase: U.S. MBA mortgage applications rose by 7.9% in the week ending April 17, with the purchase mortgage sub-index up 10.1%, indicating a rebound in housing demand that could positively impact the real estate market.
See More
Advantest Joins Applied Materials' EPIC Platform for Semiconductor Innovation
- Strategic Partnership: Advantest becomes the first automated test equipment company to join Applied Materials' new EPIC platform, enhancing the connection between front-end manufacturing technologies and back-end chip testing, thereby driving innovation in the semiconductor industry.
- Innovation Center Support: Advantest's recently launched Innovation Center will seamlessly connect with Applied's EPIC Center, providing state-of-the-art labs and research facilities to support R&D for next-generation semiconductor technologies and accelerate the development of testing solutions.
- Addressing Complex Challenges: As the complexity of high-performance computing semiconductor architectures increases, close collaboration between Advantest and manufacturing companies becomes critical to overcoming challenges and delivering innovative testing solutions that enhance efficiency and yield.
- Market Demand Response: Advantest's CEO stated that this partnership will facilitate the joint development of scalable and cost-effective testing methodologies, enabling customers to meet future technology demands and establishing a framework for rapid market response.
See More
Applied Materials Partners with Advantest to Innovate Semiconductor Testing
- Co-Innovation Center: Advantest establishes a new Innovation Center at Applied Materials' R&D campus in Silicon Valley, aiming to enhance collaboration between front-end manufacturing and back-end testing, thereby accelerating the market introduction of chip designs.
- Integration Improvement: By combining Applied's expertise in materials engineering and process control with Advantest's leading capabilities in semiconductor testing and measurement, the companies intend to enhance the integration of chip manufacturing processes, inline metrology, and final device testing efficiency.
- Significant Investment: Applied's new EPIC Center represents the largest-ever U.S. investment in advanced semiconductor equipment R&D, designed to fundamentally reduce the time required to commercialize breakthrough technologies from early-stage research to full-scale manufacturing, with operations expected to commence in 2026.
- Industry Demand Response: As semiconductor technology grows increasingly complex, Advantest emphasizes the critical need for close cooperation with supply chain partners to swiftly respond to industry demands and develop scalable testing methodologies, ensuring next-generation devices can be brought to market efficiently.
See More
Applied Materials Schedules Q2 2026 Earnings Call
- Earnings Call Announcement: Applied Materials, Inc. has announced its fiscal Q2 2026 earnings conference call scheduled for May 14, 2026, at 4:30 p.m. ET, aimed at providing investors and analysts with insights into its latest financial performance and business developments.
- Live Webcast and Replay: The call will be webcast live, allowing investors to participate via the company’s website link, with a replay available starting at 8:00 p.m. ET on the same day, ensuring that those unable to attend live can still access the information.
- Company Overview: Applied Materials is a leader in materials engineering solutions, with its technology being foundational to virtually every new semiconductor and advanced display globally, driving advancements in AI and the commercialization of next-generation chips.
- Commitment to Innovation: The company is dedicated to pushing the boundaries of science and engineering to deliver material innovations that change the world, reflecting its significant role in the semiconductor industry and its impact on future technological developments.
See More
Semiconductor Industry Outlook and Investment Recommendations
- Strong Industry Performance: Over the past six months, the semiconductor sector has delivered a remarkable 68.1% return, significantly outperforming the S&P 500's 4.8%, underscoring its critical role in the Information Age, yet future growth requires a cautious approach.
- Skyworks Solutions' Dim Outlook: With a market cap of $9.29 billion, Skyworks has experienced a 6.6% annual sales decline over the past two years, and projected sales are expected to drop by 7.9% in the next 12 months, compounded by an 18.7 percentage point fall in operating margin due to rising expenses, indicating weak market demand.
- Himax Technologies Facing Challenges: Himax, valued at $2.01 billion, has seen a 1.3% annual sales decline over the last five years, and its high net-debt-to-EBITDA ratio of 6× could force it to raise capital under unfavorable conditions, alongside a 29.9 percentage point drop in operating margin, reflecting inadequate cost structure adjustments.
- Applied Materials Worth Watching: With a market cap of $320.2 billion, Applied Materials boasts a healthy operating margin of 28.7%, showcasing efficient management and robust free cash flow, allowing for flexible growth investments or shareholder returns, with a current stock price of $408.35 and a forward P/E ratio of 32.6, indicating strong investment potential.
See More
Tesla to Build Chip Factories in Texas Using Intel's 14A Process
- Terafab Project Overview: Tesla plans to invest approximately $3 billion in the Terafab project in Austin, Texas, aimed at meeting the substantial future chip demand for electric vehicles and humanoid robots, highlighting the company's ambitious vision.
- Chip Production Capacity: The Terafab project is expected to produce one terawatt of computing capacity annually, compared to the current U.S. output of about half a terawatt, showcasing Tesla's aspirations in the chip manufacturing sector.
- Collaboration with Intel: Tesla will utilize Intel's 14A manufacturing process, marking a significant breakthrough for Intel's contract manufacturing business, which could provide robust support for its future market competitiveness.
- Supply Chain Strategy: Tesla has engaged with multiple chip equipment suppliers to seek quotes and delivery timelines, indicating a proactive approach in securing the necessary manufacturing equipment for the Terafab project, ensuring its successful implementation.
See More
U.S. Stocks Rise, Nasdaq Hits Record High
- Nasdaq Hits Record High: The Nasdaq 100 rose by 1.73%, reaching a new record high, reflecting strong investor confidence in tech stocks, particularly driven by robust corporate earnings, which may attract further investment in the tech sector.
- Earnings Beat Expectations: Companies like GE, Boeing, and Masco reported Q1 revenues of $9.34 billion, negative $1.45 billion, and $1.92 billion respectively, all exceeding market expectations, which boosted overall market sentiment and indicated signs of economic recovery.
- Oil Price Surge Affects Markets: WTI crude oil prices rose over 3% due to the blockade of the Strait of Hormuz, potentially exacerbating the global energy crisis and influencing market inflation expectations, thereby affecting investor risk appetite.
- Mortgage Applications Increase: U.S. MBA mortgage applications rose by 7.9% in the week ending April 17, with the purchase mortgage sub-index up 10.1%, indicating a rebound in housing demand that could positively impact the real estate market.
See More
Advantest Joins Applied Materials' EPIC Platform for Semiconductor Innovation
- Strategic Partnership: Advantest becomes the first automated test equipment company to join Applied Materials' new EPIC platform, enhancing the connection between front-end manufacturing technologies and back-end chip testing, thereby driving innovation in the semiconductor industry.
- Innovation Center Support: Advantest's recently launched Innovation Center will seamlessly connect with Applied's EPIC Center, providing state-of-the-art labs and research facilities to support R&D for next-generation semiconductor technologies and accelerate the development of testing solutions.
- Addressing Complex Challenges: As the complexity of high-performance computing semiconductor architectures increases, close collaboration between Advantest and manufacturing companies becomes critical to overcoming challenges and delivering innovative testing solutions that enhance efficiency and yield.
- Market Demand Response: Advantest's CEO stated that this partnership will facilitate the joint development of scalable and cost-effective testing methodologies, enabling customers to meet future technology demands and establishing a framework for rapid market response.
See More
Applied Materials Partners with Advantest to Innovate Semiconductor Testing
- Co-Innovation Center: Advantest establishes a new Innovation Center at Applied Materials' R&D campus in Silicon Valley, aiming to enhance collaboration between front-end manufacturing and back-end testing, thereby accelerating the market introduction of chip designs.
- Integration Improvement: By combining Applied's expertise in materials engineering and process control with Advantest's leading capabilities in semiconductor testing and measurement, the companies intend to enhance the integration of chip manufacturing processes, inline metrology, and final device testing efficiency.
- Significant Investment: Applied's new EPIC Center represents the largest-ever U.S. investment in advanced semiconductor equipment R&D, designed to fundamentally reduce the time required to commercialize breakthrough technologies from early-stage research to full-scale manufacturing, with operations expected to commence in 2026.
- Industry Demand Response: As semiconductor technology grows increasingly complex, Advantest emphasizes the critical need for close cooperation with supply chain partners to swiftly respond to industry demands and develop scalable testing methodologies, ensuring next-generation devices can be brought to market efficiently.
See More
