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AMAT vs ARM
Which Stock Would AI Choose? Applied Materials (AMAT) vs. Arm Holdings (ARM) Stock Comparison
Key Takeaways
- AMAT is a semiconductor equipment leader riding a record AI-driven capital-spending cycle, while ARM monetizes intellectual property through licensing and royalty revenue.
- Applied Materials trades at a much lower valuation (forward price-to-earnings ratio near 30) than Arm Holdings, whose forward P/E exceeds 120.
- Arm Holdings offers higher growth and margin potential but carries significantly greater volatility, with a beta of roughly 3.8 versus AMAT's near 1.6.
- Both companies are direct beneficiaries of AI infrastructure buildout, though through different layers of the semiconductor value chain.
- AMAT returns capital to shareholders through dividends, while ARM pays no dividend and reinvests aggressively.
Introduction
Applied Materials and Arm Holdings are two of the most closely watched names in the semiconductor ecosystem, yet they occupy fundamentally different positions within it. AMAT builds the complex machinery that manufacturers use to fabricate advanced chips, while ARM designs the processor architecture that powers billions of devices from smartphones to data-center servers. Comparing these two stocks offers traders and investors a useful lens on the ongoing artificial-intelligence (AI) infrastructure boom: one represents the "picks and shovels" of chip production, the other the intellectual-property layer of compute. This stock comparison examines their relative performance, business models, and market positioning for investors weighing exposure to the AI-driven semiconductor cycle.
AMAT Overview and Recent Performance
Applied Materials is the world's largest supplier of semiconductor manufacturing equipment and materials engineering solutions. Its systems are used to deposit, etch, and modify materials at the atomic scale, making the company a foundational enabler of leading-edge logic, DRAM (dynamic random-access memory), and advanced packaging technologies.
Recent market activity has been strong for AMAT. The company posted record revenue in its most recent fiscal quarter, with results driven by surging demand for AI-related chipmaking equipment. Management raised its calendar-year growth outlook for its semiconductor systems business and guided toward what could be the company's first $10 billion revenue quarter. Gross and operating margins have expanded to multi-year highs, reflecting premium pricing on differentiated products and strong operating leverage. The company also increased its quarterly dividend by 15%, marking a ninth consecutive year of dividend growth. Despite these results, shares remain well below their 52-week high, reflecting investor caution about how long the current equipment cycle can persist and ongoing sensitivity to export and trade policy.
ARM Overview and Recent Performance
Arm Holdings develops and licenses processor intellectual property (IP) and related compute platforms. The company earns revenue through licensing fees and per-unit royalties, and its architecture underpins the vast majority of smartphones as well as a fast-growing share of cloud and data-center CPUs (central processing units).
Recent performance for ARM has been characterized by accelerating momentum and high volatility. The company reported record quarterly and full-year revenue, with data-center royalty revenue more than doubling year over year. Arm now holds a roughly 50% share of CPU compute among top hyperscalers, and its newly launched AGI CPU platform — purpose-built for agentic AI workloads — has already drawn more than $2 billion in customer demand across the next two fiscal years. Shares have roughly doubled over the trailing 52 weeks and carry a beta near 3.8, meaning they are substantially more volatile than the broader market. That momentum reflects enthusiasm for Arm's central role in AI infrastructure, but it also leaves the stock priced for sustained, aggressive execution.
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Head-to-Head Comparison
The two companies differ sharply in business model. AMAT is a capital-equipment maker with a manufacturing footprint and a concentrated customer base of chipmakers; its revenue is inherently lumpy and tied to fab (fabrication-facility) investment cycles. ARM, by contrast, operates a high-margin IP model with roughly 90%-plus gross margins and royalty revenue that scales with device volumes, giving it a more asset-light and recurring profile.
On valuation, the contrast is stark. AMAT trades at a forward P/E near 30, while ARM's forward P/E sits above 120, reflecting the market pricing in years of AI-driven expansion for Arm. Growth profiles also diverge: AMAT is generating faster near-term revenue acceleration from an equipment supercycle, whereas ARM is growing a smaller revenue base at a steadier 20%-plus pace with a longer runway in licensing and royalties.
Risk factors differ as well. AMAT faces cyclicality, export-control exposure, and customer concentration, while ARM's risks center on valuation sensitivity, competition from rival architectures, and the execution demands of its new silicon strategy. On sector exposure, both are semiconductor plays, but AMAT skews toward manufacturing capex (capital expenditure), and ARM skews toward design and IP adoption. Market sentiment has favored both, though ARM's higher beta makes its relative performance more prone to sharp swings.
Tickeron AI Verdict
Based on observable factors such as trend consistency, stability, catalysts, and relative positioning, Tickeron's AI would likely view AMAT as the more balanced risk-adjusted candidate in the current environment. AMAT's record revenue growth, expanding margins, shareholder returns, and comparatively modest valuation suggest a steadier trend with multiple confirmable catalysts, while its lower volatility makes it more suitable for a wider range of strategies. ARM's stronger momentum and larger long-term AI opportunity are compelling, but its elevated valuation and high beta introduce greater drawdown risk. Accordingly, an AI-driven framework would likely tilt toward AMAT for consistency and stability, while acknowledging ARM's appeal for momentum-oriented and higher-risk approaches. This assessment is probabilistic in nature and should not be interpreted as personal investment advice.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is AMAT is a Hold and ARM is a Hold.
Momentum Indicator for AMAT turns negative, indicating new downward trend
AMAT saw its Momentum Indicator move below the 0 level on October 13, 2026. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 87 similar instances where the indicator turned negative. In 60 of the 87 cases, the stock moved further down in the following days. The odds of a decline are at 69%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Moving Average Convergence Divergence Histogram (MACD) for AMAT turned negative on October 13, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 45 similar instances when the indicator turned negative. In 28 of the 45 cases the stock turned lower in the days that followed. This puts the odds of success at 62%.
AMAT moved below its 50-day moving average on October 13, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for AMAT crossed bearishly below the 50-day moving average on October 19, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 10 of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 67%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AMAT declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 66%.
The Aroon Indicator for AMAT entered a downward trend on September 25, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator shows that the ticker has stayed in the oversold zone for 4 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 6 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +2.45% 3-day Advance, the price is estimated to grow further. Considering data from situations where AMAT advanced for three days, in 251 of 316 cases, the price rose further within the following month. The odds of a continued upward trend are 79%.
AMAT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 16 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 25 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 51 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 71, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is 54 (best 1 - 100 worst), indicating steady price growth. AMAT’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 76 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (12.664) is normal, around the industry mean (7.021). P/E Ratio (35.012) is within average values for comparable stocks, (95.827). Projected Growth (PEG Ratio) (0.967) is also within normal values, averaging (0.801). Dividend Yield (0.005) settles around the average of (0.008) among similar stocks. P/S Ratio (10.764) is also within normal values, averaging (27.897).
The Tickeron Seasonality Score of 95 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
ARM's Indicator enters downward trend
The Aroon Indicator for ARM entered a downward trend on October 21, 2026. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 108 similar instances where the Aroon Indicator formed such a pattern. In 94 of the 108 cases the stock moved lower. This puts the odds of a downward move at 87%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 05, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on ARM as a result. In 38 of 49 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 78%.
The Moving Average Convergence Divergence Histogram (MACD) for ARM turned negative on October 07, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 27 similar instances when the indicator turned negative. In 20 of the 27 cases the stock turned lower in the days that followed. This puts the odds of success at 74%.
ARM moved below its 50-day moving average on October 09, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for ARM crossed bearishly below the 50-day moving average on October 16, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 5 of 8 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 62%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ARM declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 80%.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where ARM's RSI Indicator exited the oversold zone, 15 of 19 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 79%.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 9 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +6.16% 3-day Advance, the price is estimated to grow further. Considering data from situations where ARM advanced for three days, in 174 of 202 cases, the price rose further within the following month. The odds of a continued upward trend are 86%.
ARM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 52 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 60 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 61 (best 1 - 100 worst), indicating fairly steady price growth. ARM’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 95 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: ARM's P/B Ratio (28.041) is very high in comparison to the industry average of (6.538). ARM has a moderately high P/E Ratio (231.214) as compared to the industry average of (23.955). Projected Growth (PEG Ratio) (2.327) is also within normal values, averaging (3.761). Dividend Yield (0.000) settles around the average of (0.011) among similar stocks. P/S Ratio (50.761) is also within normal values, averaging (45.794).
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ARM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 76, placing this stock worse than average.
AMAT | ||
|---|---|---|
OUTLOOK RATING 1..100 | 73 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 76 Overvalued | |
PROFIT vs RISK RATING 1..100 | 51 | |
SMR RATING 1..100 | 25 | |
PRICE GROWTH RATING 1..100 | 54 | |
P/E GROWTH RATING 1..100 | 16 | |
SEASONALITY SCORE 1..100 | 90 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
| AMAT | ARM | |
|---|---|---|
| RSI ODDS (%) | 2 days ago 79% | 2 days ago 79% |
| Stochastic ODDS (%) | 2 days ago 73% | 2 days ago 89% |
| Momentum ODDS (%) | 2 days ago 69% | 2 days ago 78% |
| MACD ODDS (%) | 2 days ago 62% | 2 days ago 74% |
| TrendWeek ODDS (%) | 2 days ago 67% | 2 days ago 77% |
| TrendMonth ODDS (%) | 2 days ago 70% | 2 days ago 82% |
| Advances ODDS (%) | 18 days ago 79% | 21 days ago 86% |
| Declines ODDS (%) | 7 days ago 66% | 11 days ago 80% |
| BollingerBands ODDS (%) | 2 days ago 89% | 2 days ago 82% |
| Aroon ODDS (%) | 2 days ago 63% | 2 days ago 87% |
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is overvalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
AMAT’s FA Score shows that 2 FA rating(s) are green while ARM’s FA Score has 0 green FA rating(s).
- AMAT’s FA Score: 2 green, 3 red.
- ARM’s FA Score: 0 green, 5 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
AMAT’s TA Score shows that 4 TA indicator(s) are bullish while ARM’s TA Score has 4 bullish TA indicator(s).
- AMAT’s TA Score: 4 bullish, 6 bearish.
- ARM’s TA Score: 4 bullish, 6 bearish.
Price Growth
AMAT (@Electronic Production Equipment) experienced а -8.44% price change this week, while ARM (@Semiconductors) price change was -4.80% for the same time period.
The average weekly price growth across all stocks in the @Electronic Production Equipment industry was -10.99%. For the same industry, the average monthly price growth was -23.67%, and the average quarterly price growth was -33.55%.
The average weekly price growth across all stocks in the @Semiconductors industry was -7.99%. For the same industry, the average monthly price growth was -19.69%, and the average quarterly price growth was -11.97%.
Reported Earning Dates
AMAT is expected to report earnings on Nov 12, 2026.
ARM is expected to report earnings on Nov 04, 2026.
Industries' Descriptions
@Electronic Production Equipment (-10.99% weekly)The electronic production equipment industry makes equipment used to produce semiconductors. Such equipment includes wafer fabrication, plasma etching and photo-resist processing equipment. The industry also makes chemical vapor deposition processing systems and photomasks, which are high-purity quartz plates that contain patterns to define integrated circuits layouts. Applied Materials, Inc., Lam Research Corporation, and KLA-Tencor Corporation are examples of electronic production equipment manufacturing companies.
@Semiconductors (-7.99% weekly)The semiconductor industry manufacturers all chip-related products, including research and development. These chips are used in innumerable electronic devices, including computers, cell phones, smartphones, and GPSs. Intel Corporation, NVIDIA Corp., and Broadcomm are some of the prominent players in this industry. Semiconductor companies usually tend to do well during periods of healthy economic growth, thereby inducing further research and development in the industry – which in turn augurs well for productivity and growth in the economy. In the near future, demand for semiconductor products (and possibly innovation within the segment) should only expand further, with the proliferation of 5G, autonomous vehicles, IoT, and various AI-driven electronics set to herald a new, advanced chapter in the technology-driven world as we know it. With burgeoning prospects comes great competition. In 2015, SIA estimated that U.S. semiconductor industry ranks as the second most competitive U.S. industry out of 2882 U.S. industries designated manufacturers by the U.S. Census Bureau.
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ARM and
Correlation & Price change
A.I.dvisor indicates that over the last year, ARM has been closely correlated with LRCX. These tickers have moved in lockstep 74% of the time. This A.I.-generated data suggests there is a high statistical probability that if ARM jumps, then LRCX could also see price increases.
| Ticker / NAME | Correlation To ARM | 1D Price Change % | ||
|---|---|---|---|---|
| ARM | 100% | +2.50% | ||
| LRCX - ARM | 74% Closely correlated | -1.00% | ||
| KLAC - ARM | 74% Closely correlated | +1.04% | ||
| AMAT - ARM | 73% Closely correlated | +0.98% | ||
| FORM - ARM | 73% Closely correlated | +4.16% | ||
| VECO - ARM | 66% Closely correlated | +4.69% | ||
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