Early Bird Prime for November 30, 2025

The semiconductor giant Applied Materials $AMAT ( ▲ 0.99% ) has been making waves in 2025, boasting a 53.99% increase and hitting a 52-week high.

Just a few days ago, analysts at UBS upgraded Applied Materials to a "Buy." Why, you ask? Apparently, the memory business is flexing its muscles, and UBS thinks it's strong enough to take the stock to new heights.

But before you start dreaming of dollar signs, remember that this stock is trading near all-time highs in the mid-$250s.

With a trailing P/E around 29 and a forward multiple in the mid-20s, Applied Materials seems well. But here's the kicker: it's trading well above its 5- and 10-year median valuations.

Of course, revenue for Applied Materials is tied to wafer fab equipment and memory/foundry capital expenditures. If the semiconductor cycle slows down or AI-related build-outs are put on hold, expect sudden order cuts and revenue declines.

And let's not forget the elephant in the room: export control risk. With its exposure to China, Applied Materials is in a troubling position. The ongoing U.S.–China tech tensions are a big problem, and any talk of additional export rules or reciprocal tariffs could throw a wrench in the works.

Should you buy shares of Applied Materials right now or avoid the stock? Here’s the answer: