Applied Materials (AMAT), which reports earnings after today’s closing bell, is a “picks and shovels” producer of equipment central to what the semiconductor industry needs.

Analysts expect Applied Materials to generate fiscal 2Q 2026 earnings per share of $2.68 against last year’s figure of $2.39 (+12.1%) and revenue of $7.69B vs. $7.10B (+8.3%) last year.

While perhaps not a common household name, the company boasts the 32^nd largest market cap in the S&P 500 at about $340B and an impressive stock performance: up +182% since its lows on Sept. 3. Shares hit an all-time high of $448.45 Monday, followed by a brief pullback with the rest of the sector.

AMAT’s chart is similar to many other names in the chip sector. A shorter-term trendline starting with the March 30 lows near $321 shows upside activity has a “rising wedge” pattern with a more shallow-sloping boundary line going across the highs. This suggests less aggressive highs can be reached, which is similarly reflected by the Relative Strength Index (RSI) showing bearish divergence in the form of lower highs while price makes high closes. While this is not uncommon for stocks heading into known event risk situations such as earnings, it still bears mentioning, from a technical perspective.

The options market indicates significant volatility is possible, with the potential expected move for May 15 monthly expiration coming in at +/-31.4 (7.1%) with only two trading sessions left. This also suggests the possibility of further new highs. A longer-term look at the June 18 monthly gives a range of +/-74.3 (16.7%), the lower level of which roughly aligns with the recent lows near 375 after a gap opening from Apr. 7 and suggests a potentially supportive area.

What could support the share price?

AMAT’s “picks and shovels” status in the semiconductor sector helps other semi companies make products from microscopic etching tools to thermal processing equipment. Top customers include Taiwan Semiconductor (TSM), Intel (INTC), and Samsung, which face unprecedented demand due to the artificial intelligence frenzy.

AMAT’s foundry/logic/other business contributed 62% of revenue in fiscal Q1 2026, DRAM (Dynamic Random-Access Memory) business was another third of revenue, and flash memory was 4%. It has an expanding role in photonics, which is the science of generating, controlling, and detecting light. This type of technology translates into fiber-optics (critical for the high-speed, low-latency data transfer that A.I. needs), modern camera equipment, especially LiDAR systems used by self-driving vehicles, and many other new and evolving uses. Competitors in this space include Lumentum Holdings (LITE), Fabrinet (FN), and Corning (GLW).

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