On September 9, a caller asked what Mad Money host Jim Cramer thinks of having Applied Materials, Inc. (NASDAQ:AMAT) as a long-term hold. He replied:
I want to do more than that. I want to do a long-term buy because I listened to Gary Dickerson today. He was being interviewed by my pal David Faber… AMAT is real good. I think you should stick with it and buy some.
AI Demand Drives 2026 Growth
Gary Dickerson discussed Applied Materials, Inc. growth outlook during his September 9 interview at the Goldman Sachs Communacopia + Technology Conference. He said Applied’s semiconductor equipment business was approaching 40% revenue growth in 2026, compared with forecasts of more than 20% in February and more than 30% in May. Dickerson said AI, particularly data-center demand, was an enormous driver for the business and identified agentic AI as one of the big drivers of growth in 2026.
Dickerson said Applied Materials has an eight-quarter rolling forecast and longer-term commitments from customers, adding that the company has discussions with customers extending through 2030. He also said growth in 2027 would be strong and that growth beyond 2027 would be very strong, although he did not provide a specific 2027 growth figure. Applied Materials’ fiscal third-quarter revenue rose 25% year over year to a record $9.12 billion, while GAAP EPS increased 43% to $3.17.
China Exposure and Valuation Remain Key Risks
AMAT traded at a 26.25 forward P/E as of September 9, when the shares closed at $468.85. China accounted for $2.506 billion, or 28% of fiscal third-quarter revenue, down from 35% a year earlier. Applied Materials, Inc. has said U.S. export controls can limit its ability to provide certain products and services to customers in China, increase competition from Chinese equipment manufacturers and require licenses or authorizations that may not be obtained on a timely basis. The company also recorded a $253 million charge related to a settlement with the U.S. Commerce Department’s Bureau of Industry and Security concerning an export-controls compliance matter.
These factors leave Applied Materials exposed to changes in semiconductor capital spending and U.S. restrictions on sales to China. A slowdown in AI-related equipment spending or additional export restrictions would affect the company’s growth outlook.
Hedge Fund Ownership Remains Nearly Unchanged
As per Insider Monkey, which tracks more than 1,000 hedge funds, there were 137 hedge fund holders of Applied Materials in the second quarter, compared with 138 in the first quarter. Meanwhile, short interest was at approximately 1.5% of the float.
Cramer’s recommendation comes as Applied Materials, Inc. reports strong current growth and management points to continued demand from AI-related semiconductor investment. At the same time, the company remains exposed to China-related restrictions and semiconductor spending cycles, while AMAT trades at a 26.25 forward P/E.
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