Applied Materials and Intel Offer Contrasting Paths Into the Semiconductor Boom

Two of the most prominent names in the semiconductor industry are drawing renewed attention from investors, but for very different reasons. Intel (NASDAQ:INTC) designs and manufactures chips, while Applied Materials (NASDAQ:AMAT) supplies the equipment used to make them. A recent comparison of the two highlights how differently they sit within the same supply chain.

Intel, a decades-old chipmaker, has been reshaping itself around a foundry strategy, aiming to manufacture chips not only for its own products but for external customers as well. The company operates through three main segments covering client computing, data center and artificial intelligence products, and its foundry business, with manufacturing operations spanning the United States, Ireland, Israel, and other locations. The stock closed at $95.80, up 4.72% from the prior close of $91.48, valuing the company at roughly $423 billion.

Applied Materials, by contrast, sits upstream. The company describes itself as a leader in materials engineering solutions used to produce nearly all new chips and advanced displays worldwide. Its fortunes are tied to capacity expansions across the entire chip manufacturing landscape — if foundries and chipmakers build more plants, equipment orders tend to follow. That positioning gives it broad exposure to industry growth, but also concentrates its risk: according to its fiscal 2025 annual report, two customers accounted for approximately 19% and 15% of net revenue, meaning the loss or reduced spending of either could materially affect results.

The two companies also represent different stages of the industry’s current cycle. Intel’s pivot toward foundry services places it in direct competition with established contract manufacturers and requires enormous capital investment in new fabs. Applied Materials, meanwhile, benefits from those investments regardless of which chipmakers ultimately win market share, though its revenue remains cyclical and dependent on the timing of equipment purchases.

The comparison underscores a broader question facing technology investors in 2026: whether to back the companies building the chips and factories, or the ones supplying the tools that make the building possible. Both approaches carry exposure to long-term demand for advanced semiconductors, but they respond differently to shifts in capital spending, customer concentration, and geopolitical pressures on the supply chain.

What to watch

• Intel’s upcoming quarterly results and any updates on foundry customer wins and fab construction timelines.
• Applied Materials’ next earnings report, particularly commentary on equipment orders tied to new fab projects.
• Annual report disclosures on customer concentration for both companies in the next fiscal year.
• Industry announcements regarding new manufacturing capacity in the U.S., Europe, and Asia.

Source: original release