Will Applied Materials (AMAT) Earnings Show Semiconductor Trade has Momentum?

The semiconductor sector remains well off its recent highs from June as investors assess the state of the AI boom, but earnings results from Applied Materials (AMAT) in today’s postmarket session could provide new insights about the market’s appetite for computer chips.

AMAT is a “picks-and-shovels” type of company in the broader semiconductor industry: It makes the specialized machines and software needed to build computer chips by carving and shaping the ultra-thin materials that go onto silicon wafers with atomic-level precision. The semiconductor industry can face significant supply bottlenecks, as much of the world’s computer chips are manufactured by a handful of companies including Taiwan Semiconductor (TSM), Intel (INTC), and Samsung. These companies all use AMAT products to make the chips, so Applied Materials is a foundational company in the semiconductor production ladder. Taiwan Semiconductor earlier this week said that its revenue for July reached a new record of 467.58 billion New Taiwan Dollars (about $14.5 billion), which is about 37% ahead of the same period from last year, according to reports.

Here are three things to know about Applied Materials’ earnings:

Outlook: Wall Street is looking for earnings-per-share growth of about 36.3% compared to one year ago, with estimates coming in at $3.38 against $2.48 last year, according to Zacks. Revenue expectations come in at an increase of 23.3% during the same period at $9.00B vs. $7.30B. AMAT delivered a 6.7% earnings surprise last quarter, compared to its average surprise of 6.1%.

Analysts: Financial firms recently expressed mixed opinions on AMAT. Lynx yesterday raised its price target to $650 from $540, saying demand for wafer fab equipment “appears to be rising by the month with a quiet ferocity the Street is under-appreciating.” William Blair on Tuesday assumed coverage of AMAT with a Market Perform rating, saying that while the company is benefitting from increasing AI capex spending, shares are already up more than 100% this year and trading at 29 times vs Blair’s 2027 estimates. Meanwhile, Erste Group last week downgraded AMAT to Hold, saying AMAT revenue and profit are lower than the sector average in 2026; Erste Group sees only limited upside potential from current valuations.

Technicals: AMAT shares saw strong growth in the past year with a roughly 191% gain, even after an almost -26% haircut off the highs of $739.67 on Jun. 30. AMAT recently broke to the upside from a shorter-term downward channel shape that bottomed out near $442 – a noteworthy level given that it lines up with old highs from mid-May. However, the upward move did not translate into a lasting breakout, and price repeatedly stalled near $555 heading into today’s earnings. Options market data show a potential range of about +/-38.4 (7.0%) for tomorrow’s weekly Aug. 14 expiration, the lower level of which roughly lines up with the recent relative lows of about $511 on Aug. 6. Also noteworthy is the Sep. 18 monthly expiration, with an approximately +/-97.1 (17.7%) range. This lower boundary comes in around the $450 level, which is around the previously mentioned old highs from mid-May.

ECONOMIC DATA (ET), Thursday, Aug. 13:

• 8:15 AM: Fed’s Hammack Speaks
• 08:30 AM: Jobless Claims
• 08:30 AM: Producer Price Index (PPI)
• 08:40 AM: Fed’s Barkin Speaks
• 09:00 AM: Fed’s Venable Speaks
• 10:30 AM: EIA Natural Gas Inventories
• 1:00 PM: 30-Year Bond Auction
• 04:30 PM: Fed Balance Sheet

EARNINGS SNAPSHOT:

• Premarket Thursday: JD.com (JD), Tapestry (TPR), Birkenstock (BIRK), YETI (YETI), Bullish (BLSH), Intuitive Machines (LUNR)
• Postmarket Thursday: Applied Materials (AMAT)
• Premarket Friday: N/A
• Postmarket Friday: N/A

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