Applied Materials has climbed about 72% over the last six months, hitting a new all-time high. The move is driven by chipmakers buying more equipment to handle AI workloads. Even with trade restrictions reducing their business in China, the company continued to grow through fiscal 2025. Looking ahead to 2026, demand looks strong as data center expansion continues. However, valuation is becoming a concern with the stock trading at 33x forward earnings. There is also some risk of margin pressure in the first half of the year before production volumes ramp up fully. Analysts are sticking with a moderate buy rating for now.