Applied Materials Launches New Chip Equipment and an AI System -- Is the Stock a Buy?
After a nasty downturn in 2022, shares of top semiconductor manufacturing equipment maker Applied Materials (NASDAQ: AMAT) have rallied over 40% so far in 2023 and are again approaching all-time highs. This in spite of the company reporting stalling sales this year as many of its chip fab (a factory that manufactures chips) customers pause on construction plans to manage their cash flow.
Investor optimism has been fueled by a coming wave of new chip fabs now under construction, as well as even more existing fab upgrades that will need to be filled with lots of new machinery. To meet growing demands from the semiconductor industry, Applied Materials recently announced new processes, equipment, and a new chipmaking platform. This stock still looks like a buy to me.
Semiconductors are the most complicated manufactured product there is, and the challenges are only getting more complex. The world has an insatiable hunger for silicon as chips are the powerhouse behind literally almost everything these days. Global annual chip sales are expected to reach $1 trillion by the end of this decade (a nearly 70% increase from 2022 levels), and along the way, many of those chips will get more advanced and difficult to make.
Source Fool.com
