Applied Materials, Inc. AMAT shares traded lower on Tuesday, closing down 2.27% at $206.16, pulling back marginally following last week’s strength.

The company last week reported strong third-quarter financial results, with the stock also seeing a boost from an encouraging July PPI report.

The lower-than-expected PPI numbers from last week also suggest inflation is cooling down more than anticipated. This increases the likelihood that the Federal Reserve will cut interest rates more aggressively.

Lower interest rates are generally positive for stocks, especially for companies in capital-intensive industries such as semiconductor manufacturing, where Applied Materials operates. Lower borrowing costs can reduce expenses and boost profitability.

The deceleration in both headline and core PPI implies that the cost pressures on businesses are easing. This can improve margins for companies like Applied Materials, which rely on stable input costs for their complex manufacturing processes.

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What Happened With Earnings?

Applied Materials last week reported strong third-quarter financial results, with revenue of $6.78 billion and adjusted earnings of $2.12 per share, both exceeding analyst estimates. This marks the ninth consecutive quarter in which the company has outperformed expectations.

Revenue increased by 5% year-over-year, and the company generated $2.39 billion in cash from operations, distributing $1.19 billion to shareholders.

CEO Gary Dickerson highlighted the company’s record revenues and its strategic positioning to benefit from growing AI demand.

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How To Buy AMAT Stock

Besides going to a brokerage platform to purchase a share — or fractional share — of stock, you can also gain access to shares either by buying an exchange-traded fund (ETF) that holds the stock itself, or by allocating to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Applied Materials’ case, it is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

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

Photo: Courtesy of Applied Materials