What's Happening With Applied Materials Stock?

Applied Materials (NASDAQ:AMAT) stock has had a solid run this year, gaining about 38% year-to-date. The company recently posted a better-than-expected set of Q2 FY23 results in May. While revenue rose by 6% year-over-year to $6.63 billion, earnings stood at $1.86 per share, up by about 7% year-over-year. The growth was driven primarily by the companys Semiconductor Systems business, which saw higher demand from the foundry and logic chip space. Some areas where demand remains strong include the IoT, communications, automotive, power, and sensors markets. However, Applied has indicated the demand from the memory markets has remained weak as low prices have kept companies from expanding capacity. Although Applieds growth for this year is projected to slow versus historical levels, there are some trends that have benefited the stock. More new fabs are likely to be built in response to the semiconductor supply crunch seen through the Covid-19 pandemic. Separately, investors are likely counting on trends such as generative AI to drive long-term demand in the chip industry. Nvidia stock is up more than 170% year-to-date in 2023 as investors bet that demand for high-end GPUs will surge in order to run compute-intensive generative AI algorithms. This could benefit Applied as well, given that customers could look to invest in more high-end chipmaking equipment.