Applied Materials Surges 3% on Sector Rally and Options Frenzy – What’s Fueling the Momentum?

Summary
• AMAT’s intraday price jumps 3.04% to $178.8175, breaking above 52W high of $215.7
• SEMI reports 24% YoY growth in global semiconductor equipment billings, driven by advanced logic and DRAM demand
• Options volume spikes to 4.7M shares, with 20 contracts trading at leverage ratios up to 343.35%

Applied Materials is surging on the back of a sector-wide rally in semiconductor equipment and a surge in speculative options activity. The stock’s 3.04% intraday gain has pushed it toward its 52-week high, fueled by a combination of macroeconomic tailwinds and strategic corporate moves. With the global semiconductor equipment market expanding at a record pace and options traders betting aggressively on both sides of the price action, AMAT’s momentum is a focal point for investors navigating the AI-driven tech boom.

Semiconductor Equipment Sector Rally Drives AMAT’s Sharp Intraday Surge
The surge in AMAT’s stock is directly tied to the broader semiconductor equipment sector’s strength, as highlighted by SEMI’s report showing a 24% year-over-year increase in global equipment billings. This growth is driven by demand for advanced logic and DRAM applications, which are critical for AI and high-bandwidth memory (HBM) technologies. Applied Materials’ recent partnership with Apple and Texas Instruments to strengthen U.S. chip manufacturing, along with its upcoming Q3 earnings report, has further amplified investor optimism. The stock’s breakout above key resistance levels and the surge in options activity suggest a short-term bullish consensus among traders.

Semiconductor Equipment Sector Outperforms as AMAT Leads Rally
The semiconductor equipment sector is outperforming broader markets, with SEMI’s data showing a 3% quarter-over-quarter expansion in billings. Applied Materials is at the forefront of this rally, outpacing peers like ASML, which currently trades with a -0.47% intraday decline. The sector’s strength is underpinned by sustained capital expenditures from chipmakers targeting AI and regional supply chain resilience. AMAT’s strategic positioning in advanced manufacturing and its recent dividend announcement further differentiate it within the sector.

Options Market Frenzy: Top Calls and Puts for AMAT’s Volatile Move
• MACD: -1.655 (bullish divergence from signal line at -3.771)
• RSI: 63.45 (neutral to overbought)
• Bollinger Bands: Price at $178.8175, above upper band of $172.30
• 200D MA: $168.20 (price at 10.5% premium)

Technical indicators suggest AMAT is in a short-term bullish trend, with RSI near overbought territory and MACD showing divergence. The stock’s price action above Bollinger Bands and its 200-day average indicates strong momentum. For options traders, two contracts stand out:

1. AMAT20250926C180 (Call Option)
• Strike: $180 | Expiration: 2025-09-26 | IV: 39.96% | Leverage Ratio: 43.55% | Delta: 0.468986 | Theta: -0.472269 | Gamma: 0.033673 | Turnover: $235,035
• IV (Implied Volatility): High, indicating strong market expectations
• Leverage Ratio: High, amplifying gains if AMAT breaks above $180
• Delta: Moderate, balancing directional exposure with time decay
• Theta: High, reflecting rapid time decay as expiration nears
• Gamma: High, enhancing sensitivity to price swings
• Turnover: High, ensuring liquidity for entry/exit
• Payoff at 5% Upside: $178.8175 1.05 = $187.76 → max(0, $187.76 - $180) = $7.76 per share
• Why This Contract: The $180 call offers a balance of leverage and liquidity, ideal for capitalizing on a breakout above $180 while managing time decay risks.

2. AMAT20250926P170 (Put Option)
• Strike: $170 | Expiration: 2025-09-26 | IV: 39.84% | Leverage Ratio: 119.83% | Delta: -0.215030 | Theta: -0.049490 | Gamma: 0.024818 | Turnover: $133,548
• IV: Mid-range, suggesting balanced risk/reward
• Leverage Ratio: High, offering outsized gains if AMAT dips below $170
• Delta: Moderate negative, hedging against a pullback
• Theta: Low, minimizing time decay impact
• Gamma: Moderate, providing flexibility in price swings
• Turnover: High, ensuring tradeability
• Payoff at 5% Upside: $178.8175 1.05 = $187.76 → max(0, $170 - $187.76) = $0 (no payoff)
• Why This Contract: The $170 put offers downside protection with high leverage, ideal for hedging a potential pullback while maintaining exposure to the bullish trend.

Trading Setup: Key levels to watch include the 200D MA at $168.20 and the upper Bollinger Band at $172.30. A break above $180 could trigger a parabolic move, while a retest of $170 may offer a low-risk entry. Aggressive bulls may consider the $180 call into a breakout, while cautious traders can use the $170 put as a hedge.

Backtest Applied Materials Stock Performance
Key findings • Between 2022-01-01 and 2025-09-17 we recorded 112 daily instances in which AMAT closed more than 3 % above the previous close. • On average the share price drifted only modestly higher after such spikes and under-performed the benchmark (equal-weight daily buy-and-hold) across most holding horizons. • None of the post-event returns achieved statistical significance; therefore, a systematic long-only strategy that buys after a 3 %+ daily surge offers no clear edge.You can explore the full event-study report (interactive charts, win-rate curve, cumulative P/L, etc.) in the module below.(If the module does not display automatically, please expand it to view the interactive visuals.)

Bullish Momentum Unlikely to Subside – Position for AMAT’s Next Move
The confluence of sector strength, technical momentum, and speculative options activity suggests AMAT’s rally is far from over. With the semiconductor equipment market expanding at a record pace and Applied Materials positioned at the forefront of AI-driven manufacturing, the stock is likely to test its 52-week high of $215.7 in the near term. Investors should monitor the 200D MA at $168.20 as a critical support level and watch for options volume to confirm directional bias. Meanwhile, ASML’s -0.47% intraday decline highlights the sector’s divergent momentum, but AMAT’s strategic partnerships and product pipeline make it a standout play. Act now: Buy the $180 call for a breakout trade or the $170 put for downside protection as the stock navigates its next phase of growth.