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Investors Business Daily
Investors Business Daily
Business
INVESTOR'S BUSINESS DAILY and JAMES DETAR

Chip Equipment Giant Applied Materials Emerges From Dark Period; Earns Key IBD Rating Upgrade

Semiconductor equipment giant Applied Materials weathered a rough period for it and other chip industry stocks last year. It's rebounding and its stock is rising sharply this year.

Applied Materials stock hit a 123.74 low on April 7 as the early 2025 market correction was ending, and it took off from there. It traded around 194 Wednesday afternoon, down for the day partly due to the chip equipment sector pounding on ASML's earnings. But Applied Materials is up about 36% in a little over three months.

The Relative Strength (RS) Rating for AMAT stock on Wednesday shot up from 68 to 76.

Applied Materials Nears Top Performers Group Entry

The upgraded 76 RS Rating shows that Applied Materials outperformed 76% of all stocks, regardless of industry, over the last 52 weeks for stock price performance. The best growth stocks tend to have an RS Rating north of 80 in the early stages of their moves. The rating hike moves AMAT stock to just four points below that major benchmark.

Can You Really Time The Stock Market?

Among its other key ratings Applied Materials has a 90 EPS Rating out of a best-possible 99. It also has a terrific 93 Composite Rating and a best-possible A SMR Rating (sales + profit margins + return on equity).

Notably, AMAT stock ranks B- for its Accumulation/Distribution Rating, showing that ETFs, insurance funds and the like are fairly heavy buyers of its stock.

Applied Materials stock hit an all-time high at 255.89 a little more than a year ago, on July 10, 2024. It fell in sync with chip sector contraction and drifted down to the April low before turning upward. It's closed higher three of the last four weeks but it's down for this week so far. The drop is in low volume though so that could change by end of the week.

Profit Growth Rose Last 3 Quarters In A Row

Applied Materials reported 14% earnings growth in its most recent report, to $2.39 per share. Its EPS growth rate the last three quarters rose from 9% to 12% and then 14%. Revenue rose 7% in its latest quarter, to $7.1 billion. The company is expected to report its latest results on or around Aug. 14.

Applied Materials earns the No. 7 rank among its peers in the 27-stock Electronics-Semiconductor Equipment industry group. KLA, Nova and Lam Research are among the top 5 highly rated stocks in the group.

IBD's proprietary rating measures market leadership with a 1 (worst) to 99 (best) score. The score shows how a stock's price performance over the trailing 52 weeks stacks up against all the other stocks in our database.

This article was created automatically with Stats Perform's Wordsmith software using data and article templates supplied by Investor's Business Daily. An IBD journalist may have edited the article.

Please follow James DeTar on Twitter @JimDeTar

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