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Jim Cramer Endorses Applied Materials as Long-Term Hold Amid Strong AI-Driven Growth Outlook
On September 9, CNBC’s Mad Money host Jim Cramer told a caller that he would consider a long‑term purchase of Applied Materials, Inc. (NASDAQ: AMAT). Cramer said, “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.” The comment came after Dickerson, Applied Materials’ chief executive, spoke at the Goldman Sachs Communacopia + Technology Conference about the company’s outlook for 2026.
Dickerson’s remarks highlighted a projected 40 % year‑over‑year revenue growth for 2026, a sharp increase from the more than 20 % forecast in February and the more than 30 % estimate in May. He attributed the upside to a surge in data‑center demand for artificial‑intelligence (AI) equipment, noting that “agentic AI” would be a major driver that year. The CEO also emphasized that the company’s eight‑quarter rolling forecast and long‑term customer commitments extend through 2030, and that growth in 2027 and beyond is expected to remain robust.
Applied Materials’ fiscal third‑quarter results, released on August 14, confirmed the company’s strong performance. Revenue rose 25 % year‑over‑year to a record $9.12 billion, and GAAP earnings per share increased 43 % to $3.17. The company’s guidance for the fourth quarter of fiscal 2026 calls for $10.25 billion in revenue, up from the $9.12 billion reported in Q3.
Despite the upside, Applied Materials faces exposure to U.S. export controls that limit sales to Chinese customers. China accounted for $2.506 billion, or 28 % of Q3 revenue, down from 35 % a year earlier. The company has recorded a $253 million charge related to a settlement with the U.S. Commerce Department’s Bureau of Industry and Security over an export‑controls compliance matter. Analysts note that tighter restrictions or a slowdown in AI‑related equipment spending could dampen the company’s growth trajectory.
At the time of Cramer’s call, AMAT traded at a forward price‑to‑earnings ratio of 26.25, with the share price closing at $468.85 on September 9. The valuation reflects the market’s expectation of high growth, but also the risks associated with China exposure and the cyclical nature of semiconductor capital spending.
Ownership patterns show that hedge‑fund participation remains largely unchanged. Insider Monkey data indicate 137 hedge‑fund holders in the second quarter, compared with 138 in the first quarter. Short interest stood at roughly 1.5 % of the float, suggesting limited bearish sentiment among institutional investors.
Applied Materials is the second‑largest supplier of semiconductor equipment worldwide, behind Dutch firm ASML. The company provides machinery, services and software for the manufacture of integrated circuits, flat‑panel displays, solar products and flexible electronics. Its equipment portfolio includes deposition, etch, and inspection tools that are critical to the production of AI chips and other high‑performance semiconductors.
The company’s CEO, Gary Dickerson, has repeatedly highlighted the role of AI in driving demand for advanced manufacturing equipment. In his interview, he noted that the company’s eight‑quarter rolling forecast is supported by customer commitments and that the company is actively negotiating contracts that extend through 2030.
Cramer’s recommendation comes at a time when investors are weighing the potential of AI to reshape the semiconductor industry. While Applied Materials’ financial results and growth outlook are strong, the company’s exposure to export controls and the cyclical nature of the industry remain key considerations for long‑term investors.
In summary, Applied Materials reported record quarterly revenue and earnings, and its CEO projects a 40 % revenue increase in 2026 driven by AI demand. Jim Cramer has endorsed the stock as a long‑term hold, citing the company’s growth prospects. The firm’s valuation, hedge‑fund ownership, and exposure to U.S. export restrictions to China are factors that investors will continue to monitor as the company moves forward.
Dickerson’s remarks highlighted a projected 40 % year‑over‑year revenue growth for 2026, a sharp increase from the more than 20 % forecast in February and the more than 30 % estimate in May. He attributed the upside to a surge in data‑center demand for artificial‑intelligence (AI) equipment, noting that “agentic AI” would be a major driver that year. The CEO also emphasized that the company’s eight‑quarter rolling forecast and long‑term customer commitments extend through 2030, and that growth in 2027 and beyond is expected to remain robust.
Applied Materials’ fiscal third‑quarter results, released on August 14, confirmed the company’s strong performance. Revenue rose 25 % year‑over‑year to a record $9.12 billion, and GAAP earnings per share increased 43 % to $3.17. The company’s guidance for the fourth quarter of fiscal 2026 calls for $10.25 billion in revenue, up from the $9.12 billion reported in Q3.
Despite the upside, Applied Materials faces exposure to U.S. export controls that limit sales to Chinese customers. China accounted for $2.506 billion, or 28 % of Q3 revenue, down from 35 % a year earlier. The company has recorded a $253 million charge related to a settlement with the U.S. Commerce Department’s Bureau of Industry and Security over an export‑controls compliance matter. Analysts note that tighter restrictions or a slowdown in AI‑related equipment spending could dampen the company’s growth trajectory.
At the time of Cramer’s call, AMAT traded at a forward price‑to‑earnings ratio of 26.25, with the share price closing at $468.85 on September 9. The valuation reflects the market’s expectation of high growth, but also the risks associated with China exposure and the cyclical nature of semiconductor capital spending.
Ownership patterns show that hedge‑fund participation remains largely unchanged. Insider Monkey data indicate 137 hedge‑fund holders in the second quarter, compared with 138 in the first quarter. Short interest stood at roughly 1.5 % of the float, suggesting limited bearish sentiment among institutional investors.
Applied Materials is the second‑largest supplier of semiconductor equipment worldwide, behind Dutch firm ASML. The company provides machinery, services and software for the manufacture of integrated circuits, flat‑panel displays, solar products and flexible electronics. Its equipment portfolio includes deposition, etch, and inspection tools that are critical to the production of AI chips and other high‑performance semiconductors.
The company’s CEO, Gary Dickerson, has repeatedly highlighted the role of AI in driving demand for advanced manufacturing equipment. In his interview, he noted that the company’s eight‑quarter rolling forecast is supported by customer commitments and that the company is actively negotiating contracts that extend through 2030.
Cramer’s recommendation comes at a time when investors are weighing the potential of AI to reshape the semiconductor industry. While Applied Materials’ financial results and growth outlook are strong, the company’s exposure to export controls and the cyclical nature of the industry remain key considerations for long‑term investors.
In summary, Applied Materials reported record quarterly revenue and earnings, and its CEO projects a 40 % revenue increase in 2026 driven by AI demand. Jim Cramer has endorsed the stock as a long‑term hold, citing the company’s growth prospects. The firm’s valuation, hedge‑fund ownership, and exposure to U.S. export restrictions to China are factors that investors will continue to monitor as the company moves forward.
