🚀 Ron Max: Why I Bought Applied Materials (AMAT) at US$388.80 Before Earnings

$Applied Materials(AMAT.US) 🐻 My latest trade: I bought Applied Materials $Applied Materials(AMAT.US) at US$388.80 ahead of its earnings announcement.

Buying before earnings is never an easy decision. A company can deliver good results and still see its share price fall because the market was expecting something even better.

However, I decided to take a position because I believe Applied Materials is an important player in the semiconductor industry, particularly with the growing demand for artificial intelligence (AI), data centres and advanced chips.

My investment thinking is simple: I don’t just want to invest in companies designing AI chips. I also want exposure to the companies supplying the equipment needed to manufacture those chips.

🏭 1. What exactly does Applied Materials do?

Applied Materials is one of the world’s leading suppliers of semiconductor manufacturing equipment.

Think about NVIDIA, AMD and Broadcom. These companies design powerful chips used in AI servers, computers and other electronic devices.

But designing a chip and manufacturing one are two different things.

Before a semiconductor chip reaches the market, it must go through complicated manufacturing processes.

This is where Applied Materials comes in.

Its equipment helps semiconductor manufacturers with:

• Deposition: Adding extremely thin layers of materials onto silicon wafers.
• Etching: Removing selected materials to create tiny circuit patterns.
• Inspection: Checking the quality of manufactured chips.
• Materials engineering: Helping manufacturers produce increasingly advanced semiconductors.

In simple language, Applied Materials sells the machinery and technology that help the semiconductor industry manufacture better chips.

I see it as a picks-and-shovels business in the AI revolution.

🤖 2. Why am I interested in AMAT?

The AI boom is not just about NVIDIA.

To build more powerful AI systems, the industry needs:

• More GPUs and specialised processors.
• High-bandwidth memory (HBM).
• Advanced semiconductor packaging.
• More sophisticated manufacturing technology.
• Greater production capacity.

All these developments require investment in semiconductor manufacturing equipment.

I believe Applied Materials is strategically positioned to benefit when semiconductor manufacturers expand their production capacity and upgrade their technology.

The more advanced chips become, the more complicated their manufacturing processes can be.

That creates opportunities for equipment suppliers.

📊 3. Why did I buy at US$388.80?

Looking at my trading screen, these were the numbers:

AMAT had experienced some selling pressure during the trading session.

It opened at US$377.82, recovered to US$397.20 and subsequently pulled back towards US$389.

I decided to enter at US$388.80 rather than chase the intraday high.

I also noticed the intraday average price was around US$386.80.

My entry was relatively close to that average, although I understand that an average price is not guaranteed support.

I was looking for an opportunity to participate in a company with long-term growth potential without buying after a strong intraday rally.

💡 4. Why am I making this trade now?

My decision comes down to three considerations.

First, AI infrastructure investment is still an important long-term growth theme.

The world needs more computing power, and that requires advanced semiconductor manufacturing.

Second, Applied Materials has an established business and generates revenue from semiconductor manufacturing equipment.

I am not buying a company based purely on an AI story. I want exposure to a business that provides equipment to the industry.

Third, I wanted to enter before the earnings announcement.

I am positioning ahead of a potential earnings catalyst because I believe strong business fundamentals could support the share price over time.

However, I recognise that earnings are unpredictable. Even a positive earnings surprise can result in a share price decline if expectations are too high.

🔍 5. What will I watch during earnings?

I will pay particular attention to:

1. Revenue growth and whether it beats expectations.
2. Earnings per share (EPS).
3. Gross profit margins.
4. Semiconductor equipment demand.
5. AI-related customer spending.
6. Management’s guidance for FY2027.
7. Order momentum and future business visibility.

For me, management guidance is especially important.

The market does not only care about what a company earned last quarter. Investors also want to know whether the next few quarters will be stronger.

📈 6. What’s my plan from here?

I do not want to make the mistake of treating one earnings announcement as the entire investment story.

My plan is to monitor the market reaction after earnings.

If AMAT reports strong results and management provides encouraging guidance, I will reassess whether to continue holding.

If the results disappoint or management becomes cautious, I will reconsider my position.

I also need to watch the broader semiconductor sector. Even if AMAT delivers good results, weakness in technology stocks could still put pressure on its share price.

⚠️ 7. What are the risks?

There are several risks I cannot ignore:

• Semiconductor equipment demand can be cyclical.
• Chipmakers may delay capital expenditure.
• Export restrictions can affect sales to certain markets.
• Competition and technology changes can affect margins.
• A high valuation means investors may have already priced in significant growth.
• Earnings volatility can create large overnight price gaps.

Buying before earnings means accepting the possibility that the stock could fall sharply.

I must be prepared for that possibility.

🏁 Ron Max’s Final Thoughts

I bought AMAT at US$388.80 because I believe the semiconductor manufacturing industry remains an important part of the AI investment cycle.

NVIDIA may design the chips, but companies such as Applied Materials supply important equipment that makes advanced semiconductor manufacturing possible.

I want to look beyond the obvious AI winners and understand the businesses supporting the entire semiconductor ecosystem.

My purchase is a calculated position ahead of earnings, not a guarantee that the share price will rise.

My philosophy: Don’t just follow the companies making headlines. Look at the companies supplying the tools, technology and infrastructure behind the revolution.

🚀 Ron Max — Investing Beyond the Headlines.

This is my personal trading view, not financial advice. Buying ahead of earnings carries significant risk.