Applied Materials vs. Advanced Micro Devices: Which Semiconductor Stock Is a Better Buy in 2026?

The artificial intelligence boom has transformed the technology landscape, leaving investors to choose between the companies that design powerful chips and the ones that provide the machinery to build them. Should you buy Applied Materials (NASDAQ:AMAT) or Advanced Micro Devices (NASDAQ:AMD)?

Applied Materials is a titan in the equipment space, selling the tools required to fabricate complex semiconductors. Advanced Micro Devices focuses on the architecture itself, designing high-performance processors for servers and PCs. Both companies sit at the heart of the digital economy, but they offer different paths to growth for investors.

Applied Materials provides the specialized machinery, software, and services used to manufacture chips and displays. Its global reach includes a massive footprint in China, Taiwan, and Korea, where it serves the world's largest chipmakers. In October 2026, the company expanded its partnership with Intel (NASDAQ:INTC) to focus on hardware for the semiconductor stocks market. However, its customer base is highly concentrated, with two major clients accounting for roughly 19% and 15% of revenue in fiscal 2025. Customer concentration like this adds a layer of risk to the business.

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