Why Applied Materials (AMAT) Stock Is Rising

Applied Materials, Inc. AMAT shares are trading higher by 5.3% to $207.23 during Wednesday’s session. Shares of several semiconductor and chip-related stocks are trading higher in sympathy with Advanced Micro Devices, Inc., which rose after reporting strong second-quarter earnings.

Some stocks in the sector may also be up amid reports of a new Biden administration rule on foreign chip equipment exports to China, which could exempt Japan, the Netherlands and South Korea.

Why This Matters

Applied Materials is a key supplier of equipment used in semiconductor manufacturing. The strong earnings from AMD suggest heightened demand for semiconductors, which directly translates to increased demand for Applied Materials’ products and services. As chip manufacturers expand production to meet this demand, they may invest more in advanced manufacturing equipment from Applied Materials.

The potential exemption of Japan, the Netherlands, and South Korea from new export restrictions on chip equipment to China reduces the risk of supply chain disruptions for Applied Materials. These countries are important partners in the semiconductor supply chain. Reduced regulatory hurdles can enhance the stability and predictability of Applied Materials’ operations and revenue streams.

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How To Buy AMAT Stock

By now you're likely curious about how to participate in the market for Applied Materials – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.

In the the case of Applied Materials, which is trading at $207.23 as of publishing time, $100 would buy you 0.48 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

According to data from Benzinga Pro, AMAT has a 52-week high of $255.89 and a 52-week low of $129.23.