What Happened?

Shares of semiconductor machinery manufacturer Applied Materials (NASDAQ: AMAT) jumped 3.8% in the afternoon session after a broad rally in semiconductor stocks kicked off the new year, driven by continued investor enthusiasm for artificial intelligence (AI). 

The move was part of a wider "risk-on" appetite that saw the Nasdaq Composite surge early in the session. Investors rotated back into high-growth tech stocks, with the semiconductor industry appearing poised to anchor the market's trajectory. Market analysts noted that the bullish themes from the previous year, particularly around AI and tech, were carrying forward into the new year. This sentiment was supported by the view that the chipmaking industry would remain supply-constrained as companies continued to build out the new infrastructure required for AI.

After the initial pop the shares cooled down to $267.83, up 4.2% from previous close.

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What Is The Market Telling Us

Applied Materials’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 14 days ago when the stock gained 1.6% on the news that analyst firms raised their price targets on the stock. B. Riley Securities maintained its Buy rating on Applied Materials and increased its price target to $305.00 from $270.00. Adding to the positive sentiment, Deutsche Bank also adjusted its price target upward to $275 from $230, while maintaining its Hold rating. The move also came amid a broader tech-led rally, where semiconductor stocks outperformed. This positive market behavior was supported by reports of a global semiconductor industry in an expansionary phase, with one investment bank noting strong demand for artificial intelligence and data centers was expected to fuel growth into 2026.

Applied Materials is up 63.4% since the beginning of the year, and at $267.83 per share, it is trading close to its 52-week high of $275.15 from December 2025. Investors who bought $1,000 worth of Applied Materials’s shares 5 years ago would now be looking at an investment worth $3,083.

While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report.