Applied Materials, Inc. (AMAT): A Bull Case Theory

We came across a bullish thesis on Applied Materials, Inc. on Stock Analysis Compilation’s Substack. In this article, we will summarize the bulls’ thesis on AMAT. Applied Materials, Inc.'s share was trading at $184.87 as of August 8^th. AMAT’s trailing and forward P/E were 22.49 and 18.02, respectively according to Yahoo Finance.

Applied Materials Inc. (AMAT) stands out as a leading, yet undervalued, player in materials-engineering solutions for the semiconductor and display industries. Despite near-term concerns around export-control uncertainties and the potential for a capex slowdown in 2025, the company’s long-term growth outlook remains robust. AMAT benefits from strong secular tailwinds, including the rising compute demands driven by artificial intelligence, the increasing adoption of advanced packaging technologies, and the development of new transistor architectures.

These technological trends are fueling sustained demand for the company’s core solutions, positioning it to capitalize on evolving industry needs. Additionally, AMAT’s expanding services segment offers higher-margin revenue streams, providing a valuable buffer against cyclical fluctuations and enhancing overall earnings quality. The market currently appears to underappreciate these growth drivers, focusing more on short-term risks than the company’s solid fundamental positioning.

As AI workloads intensify and semiconductor complexity grows, Applied Materials is poised to leverage its technological leadership to deliver strong earnings growth beyond the immediate horizon. This combination of structural growth, diversified revenue, and innovation leadership presents a compelling investment case, with upside potential not fully reflected in the current valuation. Investors willing to look past near-term uncertainties may find significant value in AMAT’s resilient business model and promising secular opportunities.

Previously, we covered a bullish thesis on Applied Materials, Inc. by Long-Term Pick in February 2025, highlighting its semiconductor innovation leadership and strong Q1 growth. Since then, the stock has appreciated approximately 16.95%. The thesis remains valid as secular growth drivers persist. Stock Analysis Compilation shares a similar bullish view but stresses export-control risks and near-term capex concerns.

Applied Materials, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 83 hedge fund portfolios held AMAT at the end of the first quarter which was 80 in the previous quarter. While we acknowledge the potential of 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.

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Disclosure: None.