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Applied Materials, Inc. (NASDAQ:AMAT) shares are trading lower by 6.5% to $183.64 during Friday’s session. Shares of semiconductor stocks are trading lower in sympathy with Intel Corp, which reported worse-than-expected second-quarter financial results.
Applied Materials shares have also experienced volatility this week following the news that the company will not receive funding from the CHIPS Act for its planned $4 billion R&D center in Sunnyvale, California.
According to U.S. officials, the Commerce Department determined that the project did not meet the necessary criteria for large-scale chip manufacturing, as reported by Bloomberg.
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Applied Materials is a major supplier of equipment, services and software to the semiconductor industry, which includes companies like Intel.
As Intel is experiencing financial difficulties and planning significant cost reductions, including reducing headcount and suspending dividends, it suggests a potential decrease in capital expenditures and investments in new equipment. This would directly affect suppliers like Applied Materials, who rely on such investments for their revenue.
The semiconductor industry is also highly interconnected, and financial troubles at a major player like Intel can negatively impact investor sentiment across the sector. Investors may anticipate that if Intel is struggling, other companies in the supply chain, including Applied Materials, might face similar challenges, leading to a broader sell-off in related stocks.
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By now you're likely curious about how to participate in the market for Applied Materials, be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.
For example, some stock, such as Berkshire Hathaway, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.
In the the case of Applied Materials, which is trading at $184.84 as of publishing time, $100 would buy you 0.54 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading — either way it allows you to profit off of the share price decline.
According to data from Benzinga Pro, AMAT has a 52-week high of $255.89 and a 52-week low of $129.23.
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