Conviction / Shovels
AMAT
Applied Materials Inc.
conviction · held at 5.5%
Applied Materials sells the equipment used to build chip factories, and its last results in May were a record with revenue up 11%. US export rules are expected to remove between $600 million and $710 million from this year's revenue, and the shares have fallen about a fifth in the past month ahead of results on August 13.
What we judge
The view on expected return from here, 0 to 100.
Whether the thesis could succeed without this company at all. This moves slowly, and only when the company's position genuinely changes.
What we measure
Facts from market data, not judgments.
| Price | $543.17 |
| 30-day move | -2.0% |
| Position in 52-week range | 66 |
| From the 52-week high | -26.6% |
| Average daily volume | $5.5B |
| Weight in the book | 5.5% |
| Since last rebalance | +2.6% |
Why it is in the fund
Thesis
Article highlights Applied Materials with 67% gains in AI infrastructure. As a semiconductor equipment manufacturer, they're essential for producing the advanced chips needed for agentic AI compute infrastructure.
Standing judgment
About 27% off the high but down 19.7% in thirty days, the worst tape in the fund, at roughly 36x forward. FQ3 lands 2026-08-13 and is the first real datapoint in three months. Genuinely inside the thesis, because no fab capacity is added without equipment, but a large share of revenue serves demand that has nothing to do with this thesis.
What changed, and why
Every move in this number carries the reason it moved. A score does not change without new evidence.
| Date | Conviction | Change | Cause | Evidence |
|---|---|---|---|---|
| 2026-08-05 | 62 | -4 | Cut because the drawdown is not the discount it appears to be: at roughly 36x forward this is not cheap, the last print is three months stale, and the China export headwind is unresolved into a print next week. | Most recent report is FQ2 2026 on 2026-05-15: revenue $7.91B (+11% y/y), non-GAAP gross margin 50.0%, non-GAAP EPS $2.86 (+20%) against $2.66 expected, and CY2026 wafer fab equipment growth guidance raised to above 30%. The BIS Affiliates Rule carries a $600-710M FY2026 revenue headwind, and managem |
| 2026-08-05 | 66 | flat | first v3 judgment (v2 score was uninformative, see L-001): Inside the thesis at a fair price, but growing 11% while the rest of this bucket grows 35% to 350%, with a policy headwind that is not resolving. | FQ2 2026 record revenue $7.91B, up 11% year over year, GAAP gross margin 49.9%, record non-GAAP EPS $2.86 and GAAP EPS $3.51, driven by higher ASPs in foundry/logic and DRAM; US export restrictions estimated to cut roughly $600M from 2026 results; China was 28% of systems and services revenue in fis |
| 2026-08-05 | 66 | +32 | first v3 judgment (v2 score was uninformative, see L-001): Inside the thesis at a fair price, but growing 11% while the rest of this bucket grows 35% to 350%, with a policy headwind that is not resolving. | FQ2 2026 record revenue $7.91B, up 11% year over year, GAAP gross margin 49.9%, record non-GAAP EPS $2.86 and GAAP EPS $3.51, driven by higher ASPs in foundry/logic and DRAM; US export restrictions estimated to cut roughly $600M from 2026 results; China was 28% of systems and services revenue in fis |
| 2026-07-31 | 34 | -16 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-30 | 50 | +19 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-29 | 31 | -9 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-28 | 40 | +9 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-27 | 31 | -7 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-26 | 38 | -28 | ⚠️ v2 rank-normalization artifact, unexplained move | v2 `scores` row |
| 2026-07-25 | 66 | +8 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-24 | 58 | +8 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-23 | 50 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-22 | 50 | +1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-21 | 49 | -19 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-20 | 68 | -6 | migrated from v2 (cause not recorded) | v2 `scores` row |