New York, January 16, 2026, 11:52 ET — Regular session
Applied Materials (AMAT) shares climbed 1.8% to $324.85 in late morning trading Friday, pushing higher on a rally in chip-equipment stocks following a Barclays upgrade and new signs that major chipmakers intend to maintain their spending. The stock hit an intraday peak of $330.14.
The move matters now because investors are fixated on one key question for 2026: will chipmakers continue splurging on new plants and the gear they require? Capital expenditure, or capex, refers to the funds companies allocate for factories and equipment.
Higher capex often means more orders for tool suppliers. Applied Materials finds itself right in that crosshairs, alongside other companies that sell and maintain chipmaking equipment.
Taiwan Semiconductor Manufacturing Co reported a staggering 35% surge in quarterly profit on Thursday, beating forecasts. The chipmaker also projects 2026 revenue to climb nearly 30% in U.S. dollar terms. Its capital expenditure for 2026 is pegged between $52 billion and $56 billion. CEO C.C. Wei warned, “We’re also very nervous about it … that would be a disaster for TSMC,” if the spending isn’t managed carefully. Ben Barringer, head of technology research at Quilter Cheviot, noted, “While the likes of Nvidia, Broadcom and AMD fight it out for chip supremacy, TSMC ultimately benefits as the key manufacturer of all their chips.” (Reuters)
Policy gave markets a boost. The U.S. and Taiwan sealed a trade agreement cutting tariffs on many Taiwanese exports and lowering duties for chipmakers expanding production in the U.S. Reuters noted this could spur demand for suppliers like Applied Materials, ASML, and Lam Research. Dan Hutcheson, vice-chair of TechInsights, said the deal is set to increase demand across the chipmaking supply chain. That said, it still needs approval from Taiwan’s parliament, and some U.S. tariff rules face ongoing legal challenges. (Reuters)
Barclays raised its rating on Applied Materials Thursday, saying concerns over China have been blown out of proportion. Analyst Tom O’Malley acknowledged the stock had lagged amid legitimate worries about competition and exposure in China but called the selloff an overreaction. (Seeking Alpha)
The broader group remained firm on Friday. Lam Research climbed 3.3%, ASML added 1.7%, and KLA rose 1.6%. The iShares Semiconductor ETF also advanced, gaining 1.8%.
Applied Materials, which sells chipmaking equipment and related services, often serves as a barometer for chipmakers’ confidence in demand a year ahead. At the moment, investors are zeroing in on capital expenditure plans as the key indicator.
Traders await clear evidence that spending optimism is translating into solid orders, particularly in areas like memory where budgets fluctuate quickly. A change in China demand or licensing regulations could still upend the situation.
That said, risks remain. Should the AI-driven expansion lose steam, or if fab projects face delays from permits, labor issues, or geopolitical tensions, equipment stocks could tumble just as fast as they climbed.
Applied Materials is set to release its quarterly results on Feb. 12 after the market closes. Investors will be watching closely for updates on customer spending and any shifts in the challenges related to China. (Yahoo)
