Semiconductor equipment giant Applied Materials is the IBD Stock Of The Day as AMAT stock returns to the buy zone of its recent breakout.
On the stock market today, AMAT stock jumped back into the 5% buy zone of its breakout last month. The positive move was backed by above-average trading volume. AMAT stock climbed 5% to close at 155.14.
Other chip-gear stocks rallying on Monday included ASML, KLA and Lam Research.
Semiconductor equipment stocks got a lift from news that the U.S. Department of Commerce is starting to release funding for domestic chipmaking initiatives under the U.S. CHIPS and Science Act.
"Today's announcement represents an important milestone on the path to fulfilling the tremendous promise of the CHIPS and Science Act and reinforcing America's national security, critical supply chains, and the economy," John Neuffer, chief executive of the Semiconductor Industry Association, said in a news release.
He added, "We look forward to additional projects being funded and stand ready to continue working with Commerce Department leaders to ensure the CHIPS and Science Act reinvigorates U.S. semiconductor production and innovation for years to come."
AMAT Stock Is A Recent Breakout
The CHIPS and Science Act provides a 25% tax credit for U.S. facilities that produce semiconductors or chipmaking equipment and $52 billion in funding for new or updated semiconductor-related manufacturing programs.
On Nov. 10, Applied Materials shares broke out of a double-bottom base at a buy point of 148.40, according to IBD MarketSmith charts. The 5% buy zone extends to 155.82, based on IBD trading principles.
After its breakout, AMAT stock bobbed and weaved in and out of the buy zone, but never triggered a stop-loss sell rule.
On Nov. 16, Applied Materials beat analyst estimates for its fiscal fourth quarter and offered an outlook above views for the current period. But AMAT stock fell on a reported U.S. criminal investigation into its exports to China.
Applied Materials Added To SwingTrader
Applied Materials ranks fifth out of 27 stocks in IBD's semiconductor equipment industry group, according to IBD Stock Checkup. AMAT stock has an IBD Composite Rating of 84 out of 99.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Further, AMAT stock joined IBD's SwingTrader list on Monday.
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