Tim Cook explains Apple's plan for utilizing its $600 billion investment in domestic manufacturing.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 12 2025
0mins
Should l Buy AMAT?
Source: CNBC
Apple's Investment in U.S. Manufacturing: Apple CEO Tim Cook announced a $600 billion investment in domestic manufacturing over the next four years, focusing on semiconductor production and expanding partnerships with companies like Corning and Taiwan Semiconductor.
Job Creation and Training Initiatives: Cook highlighted that Apple's efforts have already created 450,000 jobs across the U.S. and mentioned the opening of a "Manufacturing Academy" in Detroit to train workers in advanced manufacturing techniques, supported by the Trump administration's tariffs on semiconductor imports.
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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: 369.830
Low
190.00
Averages
288.05
High
425.00
Current: 369.830
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 in three segments: Semiconductor Systems, Applied Global Services (AGS), and Display. The Semiconductor systems segment designs, develops, manufactures and sells a range of primarily 300 mm equipment used to fabricate semiconductor chips, also referred to as integrated circuits (ICs). The AGS segment provides services, spares and factory automation software to customer fabrication plants globally. The AGS segment also manufactures and sells 200mm and other equipment. The Display segment is comprised primarily of products for manufacturing liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), and other display technologies for televisions, monitors, laptops, personal computers (PCs), tablets, smartphones, and other consumer-oriented devices.
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.
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- Leading R&D Investment: Applied Materials invested $3.6 billion in R&D last year, significantly surpassing competitors Lam Research's $2.3 billion and KLA's $1.4 billion, which enhances its competitive edge in technology innovation and market share expansion.
- Sales Growth Expectations: Management anticipates a 20% growth in equipment sales this year, with continued growth expected through 2027, indicating strong performance in the rapidly expanding AI market.
- Stock Valuation Analysis: Despite a more than 100% increase in stock price over the past six months, with a forward earnings expectation of 32 times and a projected 20% revenue growth, the stock is still considered a reasonable investment choice.
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- Stock Volatility Analysis: Texas Roadhouse exited its position due to lackluster earnings, and although the stock initially opened higher on accelerating same-store sales, it ultimately turned lower, reflecting market concerns over high beef prices.
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- Leading R&D Investment: Applied Materials invested $3.6 billion in R&D last year, significantly outpacing competitors' investments of $2.3 billion and $1.4 billion, which helps maintain its competitive edge in the rapidly growing semiconductor market.
- Sales Growth Expectations: Management expects a 20% growth in equipment sales this year, with continued growth into the second half of the year and 2027, indicating that the company will be a major beneficiary of the surge in AI chip demand.
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See More
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See More
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- Surging Market Demand: As global demand for AI chips outstrips supply, Applied Materials, the largest supplier of semiconductor equipment, is poised to benefit from capital expenditure plans of companies like TSMC and Micron, which plan to invest $52 billion to $56 billion and $20 billion, respectively.
- Leading R&D Investment: Applied Materials invested $3.6 billion in R&D last year, significantly surpassing competitors Lam Research's $2.3 billion and KLA's $1.4 billion, which enhances its competitive edge in technology innovation and market share expansion.
- Sales Growth Expectations: Management anticipates a 20% growth in equipment sales this year, with continued growth expected through 2027, indicating strong performance in the rapidly expanding AI market.
- Stock Valuation Analysis: Despite a more than 100% increase in stock price over the past six months, with a forward earnings expectation of 32 times and a projected 20% revenue growth, the stock is still considered a reasonable investment choice.
See More
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- Market Recovery: The S&P 500 index rose by 0.58%, reaching a one-week high, primarily driven by the Supreme Court's ruling against Trump's global tariffs, which is expected to boost economic growth and improve market sentiment.
- Weak Economic Data: The US Q4 GDP grew at an annualized rate of only 1.4%, significantly below the expected 2.8%, indicating fragility in the economic recovery and potentially leading the Fed to adopt a more cautious approach in future rate decisions.
- Rising Inflation Pressures: The December core PCE price index increased by 3.0% year-over-year, surpassing expectations of 2.9%, which may impact the Fed's monetary policy and limit its ability to cut rates, thereby affecting market liquidity.
- Positive Earnings Outlook: Over 74% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, providing support for the market and demonstrating corporate resilience amid economic uncertainties.
See More
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- Surge in Market Demand: Analysts highlight a remarkable upswing in the semiconductor sector, particularly in wafer fabrication equipment (WFE), with projected industry spending reaching $135 billion in 2026, marking a 23% year-over-year increase, which bodes well for companies like Lam Research and Applied Materials.
- Capacity Expansion and Supply Chain Health: Lam has doubled its capacity over the past four years, with management asserting that its production network and supply chain remain robust, lead times largely unchanged, and further expansion possible if necessary, ensuring readiness to meet rising market demands.
- Technology Upgrades Driving Growth: The analyst notes that foundry/logic and DRAM continue to anchor demand, while NAND upgrades accelerate within a $40 billion opportunity where Lam holds a differentiated position, although upgrade activities may not suffice to meet increasing bit demand from inference workloads.
- Long-Term Profitability Outlook: Lam's gross margins remain just below 50%, with management planning to update margin targets, though no dramatic increases are expected; instead, they focus on optimizing operating margins in the mid-30% range, with the analyst reiterating a Buy rating and a price target of $285.
See More
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- Tariff Ruling Impact: The Supreme Court's decision to strike down Trump's emergency tariffs is seen as positive for consumer-facing companies like Nike; however, the market remains cautious about the potential for tariffs to be reimposed, resulting in a muted response from retail and consumer stocks.
- Stock Volatility Analysis: Texas Roadhouse exited its position due to lackluster earnings, and although the stock initially opened higher on accelerating same-store sales, it ultimately turned lower, reflecting market concerns over high beef prices.
- Corning Stock Surge: Corning's shares rose 7%, making it one of the biggest gainers in the S&P 500 after UBS raised its price target from $125 to $160, with analysts increasing sales and earnings forecasts based on high capital expenditure plans from hyperscalers.
- Future Outlook: Analysts believe there could be further upward revisions in capital expenditures following Nvidia's earnings report next week, which may lead to additional contracts for Corning, particularly in fiber-optic cable and connectivity solutions, thereby driving the company's growth.
See More
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- Surging Market Demand: The continued increase in data center spending by the world's largest tech companies has led to Applied Materials' stock soaring over 100% in the past six months, reflecting strong market demand and investor confidence.
- Leading R&D Investment: Applied Materials invested $3.6 billion in R&D last year, significantly outpacing competitors' investments of $2.3 billion and $1.4 billion, which helps maintain its competitive edge in the rapidly growing semiconductor market.
- Sales Growth Expectations: Management expects a 20% growth in equipment sales this year, with continued growth into the second half of the year and 2027, indicating that the company will be a major beneficiary of the surge in AI chip demand.
- Improving Profitability: As demand increases, Applied Materials has expanded its gross margin to 48.72%, with further improvements expected by 2026; although market growth may slow in the future, the company will benefit from a larger installed base requiring ongoing servicing and upgrades.
See More
U.S. Hyperscalers' AI Spending Soars to $700 Billion
- Surge in Capex: The top four U.S. hyperscalers are projected to spend at least $700 billion on AI infrastructure this year, a significant increase from last year's $394 billion, indicating robust demand for AI data centers that could drive stock prices higher for related companies.
- Applied Materials' Strong Performance: Applied Materials exceeded Wall Street expectations in its fiscal Q1 2026 results, with revenue guidance of $7.65 billion suggesting nearly 8% year-over-year growth, despite a 2% decline in revenue, showcasing the company's solid position in AI infrastructure development.
- Applied Digital's Rapid Growth: Applied Digital's business is booming due to the aggressive buildout of AI data centers, with a staggering 250% year-over-year revenue increase to $127 million in Q2, and a strong outlook for continued growth, particularly in lease agreements with hyperscale clients.
- Market Demand Fuels Expansion: Applied Digital is constructing two data center campuses in North Dakota, projected to generate $16 billion in lease revenue over 15 years, while also engaging in advanced discussions with other investment-grade hyperscalers to further expand its market presence and revenue streams.
See More
