Can AI hardware optimism support Applied Materials stock?

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Applied Materials jumps 3.36% to $423

Highlights

Expectations for Applied Materials revenue growth have increased due to rising demand for AI hardware and investment in advanced chip manufacturing.
Exchange traded funds executed net outflows of $58.8 million in Applied Materials shares on October 15, mainly driven by SOXX.
Applied Materials stock is trading below key moving averages with bearish momentum signals, and the anticipated range is $389.07 to $457.11.

AI demand optimism meets ETF net selling to drive mixed flows

Investor optimism regarding increased demand for AI hardware and ongoing investment in advanced semiconductor manufacturing has fueled renewed interest in Applied Materials' core business. This environment has heightened expectations for the company's future revenue growth, serving as a catalyst for buying interest. At the same time, data from Yahoo Finance highlight that exchange traded funds executed net selling of $58.8 million in Applied Materials shares on October 15, with SOXX responsible for most of the reduction, temporarily adding liquidity pressure.

Multi-period resistance and oversold signals extend bearish momentum

On the h1 timeframe, AMAT is trading below the MA-20 and MA-50, and also below the long-term MA-200, indicating technical resistance across multiple periods. The nearest resistance is defined by the Ichimoku Kijun at $438.87. Downside support is located at $389.07, while the upper bound of the recent range is at $457.11. Bearish momentum signals persist, with both MACD and ADX indicating strong selling pressure. RSI, at 21.68, CCI, and Bull/Bear Power all register oversold readings, while Stoch RSI and the Awesome Oscillator remain neutral. A $16.28 opening gap is present, and the price sits near the low of its daily range, reinforcing the current downside momentum despite today's gain.

Rangebound outlook as downside pressure outweighs breakout risk

Over the short term, AMAT is expected to consolidate within the $389.07 to $457.11 volatility band relative to current levels. Current technical readings assign a 38% probability to an upward move, with a downward bias more likely if momentum persists. The baseline scenario is sideways movement within this defined range, but a breakout above the Ichimoku Kijun resistance at $438.87 could pave the way for further gains, while a failure at support may prompt accelerated declines.

Viktoras Karapetjanc, expert at Traders Union, sees strong investor sentiment in AI and semiconductor sectors driving optimism for Applied Materials. He notes that recent ETF outflows create short-term liquidity headwinds, but underlying demand trends remain supportive. The analyst believes that, despite pronounced technical resistance, the fundamental backdrop argues for a constructive medium-term outlook. "If bulls can reclaim the $438.87 level, I expect upside momentum to return quickly," he says.

Earlier, analysts noted that Applied Materials faced ongoing selling pressure despite continued investment in semiconductor R&D and collaborations. The latest trading action and technical signals confirm persistent downside momentum, making a breakout above the $438.87 Ichimoku Kijun resistance or a drop below $389.07 the key levels to watch for a decisive move.

Source of Data: AMAT Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.