Shares of semiconductor capital equipment maker Applied Materials (NASDAQ: AMAT) rallied 22.7% in February, according to data from S&P Global Market Intelligence. As the most diversified semicap equipment vendor, Applied usually serves as a good barometer of the health of the overall semiconductor industry.

Applied's Feb. 15 report came at a point of conflicting narratives across semis. Large, mature parts of the industry, such as PCs and smartphones, are mired in a long slump. And demand for electrification and electric vehicle (EV) trailing-edge chips just started a downturn, too. But artificial intelligence (AI) chip demand is obviously increasing, and China is making strategic purchases of trailing-edge equipment.

Applied's results seemed to indicate the worst may be behind the industry, with the tantalizing potential of an AI-led recovery pushing shares higher.

Continue reading

Source Fool.com