Is Applied Materials (AMAT) Well-positioned to Capitalize the AI Trend?

Matrix Asset Advisors, an asset management company, released its Q2 2025 investor letter. A copy of the letter can be downloaded here. The stock market rallied +10.94% in Q2 after falling -4.27% in the first quarter of 2025. Moreover, the market was up +6.20% for the year-to-date through June 30. Matrix’s equity portfolios performed well in both Q2 and for the year-to-date through June 30. The Matrix Dividend Income (MDI) portfolio delivered another strong quarter, while the Large Cap Value (LCV) portfolio, with more technology exposure, fully participated in the market's rebound, ending the quarter higher for the first six months of the year. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Matrix Asset Advisors highlighted stocks such as Applied Materials, Inc. (NASDAQ:AMAT). Applied Materials, Inc. (NASDAQ:AMAT) offers manufacturing equipment, services, and software to the semiconductor, display, and related industries. The one-month return of Applied Materials, Inc. (NASDAQ:AMAT) was -7.48%, and its shares lost 8.18% of their value over the last 52 weeks. On August 11, 2025, Applied Materials, Inc. (NASDAQ:AMAT) stock closed at $184.38 per share, with a market capitalization of $147.965 billion.

Matrix Asset Advisors stated the following regarding Applied Materials, Inc. (NASDAQ:AMAT) in its second quarter 2025 investor letter:

"We started a new position in Applied Materials, Inc. (NASDAQ:AMAT), a global supplier of equipment used in the fabrication of semiconductors. Surging demand for advanced chips that fuel Artificial Intelligence (AI), and high performance computing is driving a significant investment in semiconductor manufacturing equipment. AMAT is well positioned to capitalize on this trend. The company has a track record of strong performance, consistently generating significant cash flow from operations, allowing it to invest in R&D and return value to shareholders through buybacks and dividends. This is an example of a company that we had previously done the work on hoping for an opportunity to add it to the LCV portfolio on price weakness. We started our position after the April 2nd reciprocal tariff announcements caused a sharp, short-lived market pullback."

Applied Materials, Inc. (NASDAQ:AMAT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 83 hedge fund portfolios held Applied Materials, Inc. (NASDAQ:AMAT) at the end of the first quarter, which was 80 in the previous quarter. While we acknowledge the potential of Applied Materials, Inc. (NASDAQ:AMAT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Applied Materials, Inc. (NASDAQ:AMAT) and shared the list of most undervalued semiconductor stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.