tech
Applied Materials is about to report earnings. How to trade the AI picks-and-shovels play ahead of results
Even as the stock has more than doubled in 2026, the outlook is still strong for the wafer fab equipment giant.
TL;DR
- Applied Materials (AMAT) is a leading supplier of wafer fab equipment, essential for chip manufacturing.
- The market expects a significant earnings move for AMAT, with the stock already up over 100% in 2026.
- Elon Musk's Terafab investment in Texas validates the demand for chip manufacturing machinery.
- AMAT is positioned to fulfill demand from major players like Taiwan Semiconductor Manufacturing, Intel, and new entrants like Terafab.
- Government subsidies (e.g., CHIPS Act) are driving capital expenditures in the semiconductor space, benefiting AMAT.
- A specific options trade strategy is detailed: buying an out-of-the-money call and selling an out-of-the-money put to mitigate costs before the earnings report.