Applied Materials vs. AMD: Which AI Semiconductor Stock Is a Better Buy in 2026?
AMD grew far faster than Applied Materials in 2025, but its stock carries a richer valuation and potential dilution from warrants issued to two large AI customers.
Overview
Choosing between Applied Materials (NASDAQ:AMAT) and Advanced Micro Devices (NASDAQ:AMD) means weighing a highly profitable chip equipment supplier against a faster-growing chip designer.
Applied Materials makes the equipment that chip factories use to produce semiconductors. AMD designs processors for products ranging from game consoles to large data centers and relies on outside foundries to manufacture them. Both sell into the demand that has drawn investors to artificial intelligence (AI) stocks, but they offer very different risk and reward profiles.
Details
Alongside its manufacturing equipment, Applied Materials sells related services and factory automation software. The company occupies a highly technical niche among semiconductor stocks, selling to the large manufacturers that fabricate chips. That customer base is concentrated, and two customers accounted for approximately 19% and 15% of net revenue in fiscal 2025, which ended in October 2025.
Source
Originally published at www.fool.com.
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