Applied Materials (AMAT) soared 6.96% on Tuesday, closing at a record $490.05 and reaching an intraday high of $491.51, as the company's chief financial officer signaled robust demand from customers building out artificial intelligence chip capacity. The surge pushed the stock to a new 52-week high and underscored the market's growing appetite for semiconductor equipment makers tied to the AI boom.
The Philadelphia SE Semiconductor Index jumped 5.9% on the day, while the Nasdaq Composite edged up just 0.03%, highlighting a clear divergence between broad tech and chip-related stocks. The rally was concentrated in equipment names, with peers Lam Research (LRCX) climbing 5.45%, KLA Corporation (KLAC) adding about 5.4%, and ASML Holding (ASML) gaining 4.7% in U.S. trading.
Speaking at the BofA Securities Global Technology Conference, Applied Materials CFO Brice Hill told investors that customers are placing new orders as they connect AI demand to chip factory spending. He raised the company's forecast for semiconductor systems growth to above 30% for 2026, up from earlier expectations. Hill noted that demand is being "metered by clean room space," referring to the ultra-clean factory floors required for chip production, which can take three to four years to set up. He added that Applied Materials is not the output bottleneck as long as it receives proper customer signals.
The company's strong outlook follows a record second quarter reported in May, with revenue hitting $7.91 billion, up 11% year over year. GAAP earnings per share also reached a record $3.51, while adjusted EPS came in at $2.86. For the third quarter, Applied Materials guided revenue of $8.95 billion, plus or minus $500 million, and non-GAAP EPS of $3.36, plus or minus 20 cents. CEO Gary Dickerson said the company has an "exceptionally strong foundation" as AI infrastructure spending drives demand for leading-edge logic, DRAM memory, and advanced packaging.
Applied Materials has been positioning itself for sustained growth beyond a single quarter. In late May, the company announced that SCREEN Semiconductor Solutions would join its EPIC Center, a Silicon Valley research facility aimed at accelerating the transition of chipmaking technology from lab to factory. Broadcom had already joined the EPIC Center for advanced packaging, which involves connecting chips and chiplets more tightly in high-performance hardware.
Despite the positive momentum, the stock now trades at a price-to-earnings ratio above 46, leaving limited margin for error if AI capital spending pulls back, memory prices shift, or chipmakers delay factory plans. The company has highlighted risks from changing demand, export controls, tariffs, supply chain constraints, and reliance on a handful of key customers.
Market participants are now looking ahead to Broadcom's earnings report on Wednesday and the U.S. jobs report on Friday, both of which could test whether AI-equipment demand can continue to outweigh concerns about inflation from rising oil prices and interest rate risks.
"There was massive dispersion across AI infrastructure," said Mike Dickson, who runs portfolio management at Horizon Investments, in comments to Reuters. Applied Materials was among the winners as chip equipment names led the market on Tuesday, even as the broader market showed mixed performance.
