Key Highlights

● Applied Materials traded at $395.08 during the session ahead of its Earnings report.

● The fiscal fourth-quarter report is due after the bell on Thursday, November 12.

● Lam Research and KLA also rallied, and Teradyne jumped after a Jefferies initiation.

● Investors will focus on revenue, outlook and Demand for AI-related chip capacity.

Applied Materials (NASDAQ:AMAT) rallied on Wednesday, trading at $395.08 during the session as semiconductor equipment stocks bounced back alongside the broader chip sector. The gain came one day before the company's fiscal fourth-quarter report, due after the bell on Thursday, November 12.

Applied Materials is the largest supplier of equipment used to manufacture semiconductors, selling machines that deposit, etch and modify the ultra-thin layers of material that make up a chip. Its customers include the world's biggest chipmakers and memory producers, so its results are often viewed as a barometer for Capital spending across the industry. When chipmakers commit to new factories or upgrade existing ones, Applied Materials is typically among the first suppliers to see the orders, which is why investors treat its outlook as an early signal for the whole sector.

Its fellow equipment makers rallied too. Lam Research (NASDAQ:LRCX) jumped and KLA (NASDAQ:KLAC) climbed. Teradyne (NASDAQ:TER), which makes chip testing machines, also jumped after Jefferies initiated coverage at Buy.

CoreWeave ignites the chip complex

The catalyst was CoreWeave (NASDAQ:CRWV), the AI cloud provider. It reported third-quarter Revenue of $3.66 billion, more than double a year earlier and ahead of estimates near $3.54 billion to $3.55 billion. It raised its 2026 revenue outlook to $13.0 billion to $13.3 billion and reported a Backlog of about $132.5 billion.

"Demand for compute is growing faster than the capacity to deliver that infrastructure," CEO Michael Intrator said on the earnings call.

For equipment suppliers, the logic runs down the Supply chain: more demand for AI computing means more chips, and more chips mean more factories and tools. That chain of reasoning had been questioned during last week's AI-capex scare, when chip stocks tumbled.

The Philadelphia Semiconductor index soared on Wednesday. Memory names including Micron (NASDAQ:MU) and Sandisk (NASDAQ:SNDK) jumped, and AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC) climbed sharply.

The broader market

Technology was the best-performing S&P 500 sector by a wide margin. The S&P 500 rose 98.45 points to 7,619.38, the Nasdaq Composite gained 400.31 points to 25,466.19 and the Dow Jones Industrial Average added 254.60 points to 52,486.49. The Russell 2000 climbed 24.88 points to 2,846.26 and the VIX fell to 17.49.

The Bond Market was closed for Veterans Day. Rates remain an important variable after Tuesday's hotter-than-expected October consumer price report, which left a December Federal Reserve rate hike seen as nearly fully priced.

Goldman Sachs described AI stocks as "clearly in oversold territory," while Berenberg said, "Investors are buying back into positions with valuations now considerably lower."

All Eyes on Thursday's Earnings Report

All eyes now turn to Thursday evening. Investors will focus on Applied Materials' revenue and outlook, with particular attention to demand from chipmakers building advanced logic and memory capacity for AI. Commentary about different regions and customer segments may also draw scrutiny.

The setup has a complication. After the bell, Nvidia (NASDAQ:NVDA) shares fell in after-hours trading following newspaper reports about the company's leadership, and Nasdaq-100 futures slipped. That could weigh on chip stocks before Applied Materials reports.

Cisco (NASDAQ:CSCO) also reports after the bell on Thursday, while Nebius (NASDAQ:NBIS) reports before the open. Weekly jobless claims are due at 8:30 a.m. Eastern time, and October producer prices land Friday. Nvidia's November 17 earnings and the Federal Reserve's December 8 and 9 meeting are the next major events for the semiconductor group.