Applied Materials, Inc.: The Sky’s the Limit for This AI & 5G Stock

AMAT Stock Is Both an AI Stock & a 5G Stock

Regular Profit Confidential readers will know that we’re about as bullish as you can get on artificial intelligence (AI) and 5G stocks.

Both industries are set to see huge increases in value in the next few years, with a cumulative market value likely in the trillions of dollars. With that kind of potential, it makes sense that a company that can act as both an AI company and a 5G company will attract investor attention.

And that brings me to Applied Materials, Inc. (NASDAQ:AMAT). Applied Materials stock is poised to provide huge returns as a result of the AI and 5G industries blowing up.

But before I get into why I love AMAT stock, I’ll explain why the AI and 5G industries are so exciting.

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AI Industry Overview

In the case of AI stocks, it’s pretty obvious why they’re intriguing: new trillion-dollar industries don’t come around very often.

AI technology has the chance to radically alter almost every aspect of the way we live. From autonomous vehicles, to computing, to medical research, to marketing, to law, and everything in between, AI companies could make innovations in many sectors.

IDC estimates that global AI and machine learning revenue could crest $327.0 billion in 2021. (Source: “IDC Forecasts Improved Growth for Global AI Market in 2021,” IDC, February 23, 2021.)

That projection follows many others that show AI having an impact of more than $2.0 trillion on the global economy in the years to come.

Furthermore, economic downturns aren’t really able to slow down these technological developments. That’s because they’re largely funded by billion-dollar corporations with lots of cash on hand and plans to reach market on time scales of—in some cases—decades.

Not to mention that investors tend to salivate whenever AI is mentioned, meaning there won’t likely be a shortage of capital in the industry.

While many stocks have lost tremendous value during the global economic slowdown caused by the COVID-19 pandemic, numerous tech stocks—including AI stocks—have seen huge gains.

The month-to-month or year-to-year performance of the stock market is, ultimately, irrelevant when you’re operating on the assumption of trillions of dollars in potential market growth.

AI isn’t just another big business; it’s one of the biggest businesses right now.

LinkedIn’s 2020 Emerging Jobs Report named “artificial intelligence specialist” as the job with the highest hiring growth rate in the previous five years. (Source: “2020 Emerging Jobs Report,” LinkedIn, last accessed September 30, 2021.)

5G Industry Overview

5G stocks are no slouches, either. While perhaps not as potential-filled as the AI industry, 5G has a much clearer path forward. Many believe we’ll see global adoption of 5G technology within the next few years.

5G companies are providing a product that everyone wants: blazing-fast Internet speeds. And that want extends beyond everyday Internet users like you and me. Companies that need to ferry huge amounts of data over the Internet are going to be early adopters of 5G technology.

On top of that, COVID-19 has forced many businesses to rethink how they run their workplaces. There’s little doubt that the age of the remote worker has arrived.

That means 5G companies could see a surge in business in the near future. And, of course, a surge in business for 5G companies means a surge in value for 5G stocks.

Then there’s 5G’s connection to AI. Companies that aim to improve machine learning and the Internet of Things (IoT) will want to take advantage of supercharged Internet speeds in order to send and receive data from their products.

Therefore, 5G companies are natural allies of AI companies. The more AI gets integrated into society, the more we’ll need 5G Internet. And the more 5G Internet spreads, the more we’ll see an acceleration of AI capabilities.

That could lead to massive gains from stocks in both sectors for years to come. That’s why companies that combine the best aspects of 5G and AI are worth attention from investors.

Why Applied Materials Stock Is a Top AI & 5G Stock

So what makes AMAT stock so well suited to see growth from both the AI market and the 5G market?

Simple: Applied Materials, Inc. is a generalist tech manufacturer. Its business is chip manufacturing, advanced displays, semiconductors, and even solar panels.

If any one of these three industries (AI, 5G, solar panels) were to reach their potential, Applied Materials stock could be among the highest gainers. If all three segments prove successful for the company, we’re looking at a stock that could provide major rewards to shareholders.

With these multi-billion-dollar industries projected to see massive growth in the coming years, companies like Applied Materials, Inc. can be expected to increase in potential and value.

In other words, AMAT stock is a great combination of an AI stock and a 5G stock.

Chart courtesy of StockCharts.com

In the chart above, it’s clear that Applied Materials stock has achieved impressive growth over the past year.

AMAT stock will likely rebound strongly as the economy gets back to pre-COVID-19 levels. The stock is set for a strong upward trend in the near term and for potentially exponential gains in the coming years as the AI and 5G industries grow.

What’s more, with COVID-19 lingering longer than we’d like, going for a tech stock that’s projected to see huge gains for years to come is a great way to lessen an investment portfolio’s pandemic-induced volatility.

Analyst Take

Investing in stocks from the AI industry or the 5G industry could be a smart move. After all, AI and 5G are widely considered to be industries of the future. Any stock that gives investors exposure to both of these markets is one that ought to be given a careful look.

Applied Materials stock is great because it gives investors exposure to both the AI sector and the 5G sector. It’s a rare offering that could result in massive profits for investors.