Should You Buy, Sell or Hold AMAT Stock After a 6.2% YTD Rise?

Group 1 - Applied Materials (AMAT) has outperformed the Zacks Computer and Technology sector with a year-to-date gain of 6.2%, compared to the sector's return of 2.5% [1][8] - The company is positioned to benefit from the AI-driven semiconductor boom, particularly in advanced chip manufacturing technologies such as gate-all-around (GAA) transistors and high-bandwidth memory [3][5] - AMAT's gross margins reached 49.2% in Q2 of fiscal 2025, the highest since 2000, with expectations for advanced DRAM revenues to grow over 40% in 2025 [4][6] Group 2 - Despite strong performance, AMAT faces challenges from U.S.-China tensions and export restrictions, which have significantly impacted its sales in China, leading to a 37.3% year-over-year decline in Q2 fiscal 2025 [9][10] - The company's revenue share from China has decreased from 43% to 25% over the past year, marking three consecutive quarters of decline [10] - AMAT operates in a competitive landscape, facing rivals such as Lam Research, ASML Holding, and KLA Corporation, which could impact its market position [11][12][13] Group 3 - AMAT's current valuation, with a forward P/E ratio of 17.92, is below the industry average of 31.62, indicating potential upside for long-term investors [14] - The company maintains a strong position in semiconductor manufacturing and AI-driven chip development, suggesting that holding AMAT stock is advisable for investors at this time [17][18]