8 Stocks on Jim Cramer’s Radar

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

Number of Hedge Fund Holders: 74

Cramer mentioned that semiconductor stocks like Applied Materials, Inc. (NASDAQ:AMAT) recently saw a spike because of Taiwan Semiconductor’s strong earnings result.

“Couple of semiconductor names like Applied Materials, which make semiconductor capital equipment, and even the lowly Intel both also roughly 12% higher thanks to the amazing quarter (of Taiwan Semiconductor)… Applied Materials rallied 4.5% last Thursday and is now up more than 8% in the three trading days since the quarter, amazing for a supplier.”

Applied Materials (NASDAQ:AMAT) is a provider of manufacturing equipment, services, and software for the semiconductor and display industries. The stock often gets impacted by broader market events. For example, its stock experienced a decline in October 2024 because of a disappointing quarterly report from ASML. In the past week since TSMC reported its fourth-quarter earnings report, AMAT stock has seen a modest uptick.

Cramer discussed TSMC’s earnings report and its reverberations on the other stocks in the industry as he said:

“While Taiwan Semi itself was only up 1.5%, by the end of last week, the company’s commentary was so positive that the Philadelphia Semiconductor Index finished the week up 5.4%. Even lowly worm Intel managed to become one of the five best-performing stocks… up more than 12% and many other chip plays had huge gains, especially the semiconductor capital equipment names. Let’s talk about those. There’s a reason these stocks ran… Taiwan Semi’s guidance for the first quarter of 2025. In the first quarter, Taiwan Semi expects revenue of $25 to $25.8 billion, which represents an increase of 33 to 37% year-over-year.”

Cramer also mentioned the importance of capital spending from Taiwan Semiconductor as that is a positive for companies like Applied Materials that supply the high-cost equipment used in semiconductor manufacturing. While TSMC’s spending is encouraging, Cramer noted that semiconductor capital equipment stocks, which started 2025 strong, have struggled over the past six months. Only a few companies, including Applied Materials, ended the year in the green. He added:

“Long story short, I think the breakout in the semiconductor capital equipment group is a reflection of investors starting to think once again about the scale of the opportunity, not about what’s dismal, but the opportunity ahead for these companies.”