Applied Materials (AMAT) closed the holiday-shortened week at $450.06 on Friday, a 4.1% gain from the prior Friday's close, keeping the stock near all-time highs. The chip equipment maker touched an intraday peak of $462.40 on Wednesday before settling back, reflecting choppy but overall strong trading.
Wall Street's major indexes all finished at record levels, with technology and semiconductor shares leading the advance. The Nasdaq Composite rose 2.39% for the week, while the S&P 500 extended its winning streak to nine consecutive weeks. Wells Fargo's Ohsung Kwon described the sentiment around artificial intelligence as "euphoric," attributing the rally to robust earnings momentum.
Analyst commentary provided additional support. Cantor Fitzgerald's C.J. Muse reiterated an Overweight rating and a $575 price target on Thursday, the highest on Wall Street. The consensus target from 29 analysts stands at $463.83, just above Friday's close, according to Benzinga.
Applied Materials shares surged 5.26% on Tuesday, then gave back 1.46% on Wednesday before posting modest gains on Thursday and Friday. The weekly performance was strong, though intraday volatility highlighted some uncertainty.
The company reported fiscal second-quarter revenue of $7.91 billion, a record, and adjusted earnings of $2.86 per share. Its current-quarter revenue forecast calls for approximately $8.95 billion, plus or minus $500 million. CEO Gary Dickerson described the results as a "record quarterly performance," while CFO Brice Hill said AI growth is "in full force." The company now expects its semiconductor equipment business to rise more than 30% in calendar 2026.
William Kerwin, senior equity analyst at Morningstar, told Reuters the results pointed to a "strengthening" AI upcycle for wafer-fabrication equipment (WFE) spending. Applied Materials makes the tools used to produce chips, positioning it as a direct beneficiary of AI-driven capital expenditure by chipmakers.
Other chip-equipment stocks traded in a narrow range on Friday. Lam Research edged up 0.14%, KLA slipped 0.31%, and ASML's U.S. shares gained 0.45%. The group showed no clear outlier, reflecting a wait-and-see stance ahead of key events.
Broadcom is set to report fiscal second-quarter results after the close on Wednesday, offering another gauge of AI chip demand. On Friday, the May U.S. jobs report will be released, which could influence interest rate expectations, bond yields, and equity valuations. Hotter-than-expected data might pressure high-multiple tech stocks.
Risks remain. Slower AI spending or delays in fab construction could cloud Applied's order book. The company itself cites export controls, tariffs, geopolitical tensions, and customer demand as potential headwinds that could alter its outlook.
Despite these uncertainties, Applied Materials is viewed as a straightforward AI play, providing the equipment essential for chip production. Next week's test will determine whether the stock can attract fresh capital or if the current price already reflects all positive factors.
