10 Best Fundamental Stocks to Invest In

7) Applied Materials, Inc. (NASDAQ:AMAT)

10-Year Revenue Growth Rate: ~11.8%

10-Year Net Income Growth Rate: ~22.2%

Number of Hedge Fund Holdings: 77

Applied Materials, Inc. (NASDAQ:AMAT) is engaged in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries.

Applied Materials, Inc. (NASDAQ:AMAT)’s growth trajectory should further strengthen as a result of its competitive advantages. These include intangible assets regarding wafer fabrication equipment design expertise and R&D, and cost advantages. The semiconductor capital equipment (SCE) sector continues to transition to a period of high single-digit growth and industry fundamentals are looking positive. The growth should stem from primary secular trends such as larger chips and increased demand for trailing node technology. Wall Street believes that Applied Materials, Inc. (NASDAQ:AMAT) should benefit from such trends, mainly in areas like advanced packaging and Gate-All-Around (GAA) technology.

Experts believe that the company should be able to outperform the WFE industry in 2024 as a result of its exposure to leading-edge foundry/logic and DRAM technologies. Applied Materials, Inc. (NASDAQ:AMAT)’s focus on areas with incremental spending, like GAA, HBM, backside power, and advanced packaging, should drive market share gains in 2024 and 2025.

The company’s robust product lineup, mainly in areas like GAA technology and advanced packaging, aligns with the broader industry’s move towards more sophisticated chip designs. As demand for high-performance computing and AI grows, Applied Materials, Inc. (NASDAQ:AMAT)’s expertise in these advanced technologies should drive revenue growth.

Wall Street analysts believe that the shares of the company have an average price target of $242.95. Parnassus Investments, an investment management company, released the second quarter 2024 investor letter. Here is what the fund said:

“Applied Materials, Inc. (NASDAQ:AMAT) is the world’s largest supplier of wafer fabrication technologies used in semiconductor manufacturing. The company reported solid earnings for the quarter, and investors believe Applied Materials should continue to benefit from accelerated industry spend due to AI and share gains.”