Reading Through Comments From Applied Material’s Investor Conference

In today’s video, we discussed some of the investor conference presentations we’ll be tuning into today and tomorrow. Applied Materials’ (AMAT) presentation at the Citi 2026 Global TMT Conference has wrapped, and while we would have pressed management a bit more on the pricing front, the comments confirmed the demand vector remains on the upswing and that AMAT is focused on pricing.

There were some questions on DRAM capacity and several on industry capacity levels rising for IoT, Communications, Auto, Power, Sensor and related end markets that fall under AMAT’s ICAPS segment. While most of the market is focused on AI and data center, AMAT sees its ICAPS business growing this year and next as incremental capacity is added to meet demand.

On the question about how AMAT tracks demand, here is what CFO Brice Hill had to say:

“We have a rolling eight-quarter forecast we get from our largest customers, which has been increasing all year. And we attribute that to the AI artificial intelligence systems demand that’s happening across the market. So we’ve got that information coming in directly from our customers that’s been rising.

“That gives us some confidence. When we look beyond our customers to their customers. Cloud service providers, as an example, we see the CapEx forecast rising all year from the cloud service providers. I think it’s over $700 billion this year for the US companies, almost $1 trillion for the global companies. Those numbers continue to go up.

“… we have a fab tracker. It’s well over 100 factories that we’re tracking at this point.

“There were 10 – more than 10 added in each of the last two quarters. And that’s another strong leading indicator for us is how much clean room is being put in place. We’ve said over the medium term, this ramp, there’s more demand than there is supply. So we’ve said in the medium term, it’s gated by clean room. And so we’re looking closely at the investments customers are making in clean room when those factories come on. And that gives us confidence also.“

Reading between those comments, especially for AMAT’s largest customers, which include Taiwan Semi (TSM), Samsung (SSNLF) and Intel (INTC), the company has an ample line of sight for not only its demand but for its own supply chain.

To the above comments, we’ll also share the findings from Semi, the global semiconductor trade association, that semiconductor equipment billings in in Q2 2026 rose 11% sequentially and 23% year over year. What stood out to us in the data is that even though semiconductor equipment billings in China still accounted for around 30% of total billings in the quarter, that’s down several percentage points compared to Q2 2025. The reason for that is the upswing in filings growth in Europe (+70%), Korea (+54%), North America (+27%), and Taiwan (+24%).

While a bit backward facing, those year-over-year growth rates speak to the capital spending discussed earlier this year as well as reshoring efforts, particularly in the U.S. However, when we contemplate the multi-year guidance offered by Nvidia (NVDA), Marvell (MRVL), Broadcom (AVGO), Advanced Micro Devices (AMD) and others, chip industry capacity looks to remain tight deep into 2027, if not even longer.

When AMAT presents at the Goldman Sachs Communacopia conference tomorrow, we’ll look for incremental comments on multi-year demand prospects and pricing.

Getting back to AMAT shares, we added to the Portfolio’s position late last week at $435.77, and that slug of shares is now nicely profitable as is our overall position. We continue to rate AMAT shares a One.

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At the time of publication, TheStreet Pro Portfolio was long AMAT, AVGO, MRVL, and NVDA.