Applied Materials' equipment sales for advanced semiconductor capacity (AI chips, HBM memory) are expected to extend the company's growth runway as demand outpaces supply.

U.S. equity markets rebounded significantly in the second quarter of 2026. The S&P 500 rose 15.2% and the Russell 2000 climbed 21.5%, with technology and AI stocks driving the rally and now comprising nearly 50% of the S&P 500's weight. Demand for advanced AI chips has emerged as a structural opportunity in semiconductors, transcending previous cycles. Growth stocks outperformed value, though value retained its year-to-date lead. Despite strong profit margins, extreme valuations warrant caution.

The Cambiar Opportunity Fund returned 11.58% during the quarter, underperforming the Russell 1000 Value Index's 13.87% gain due to its deliberate underweight in technology. The market remains speculative—evidenced by the SpaceX IPO and sharp rises in memory chip stocks—and faces uncertainties from geopolitical tensions and AI disruption that could challenge growth and earnings. Portfolio construction emphasizes broad sector diversification.

Cambiar's Q2 2026 investor letter highlighted Applied Materials, Inc. (NASDAQ: AMAT) as a key holding. The semiconductor equipment and materials engineering company closed at $511.38 per share on September 30, 2026, up 21.52% over the past month and 136.92% over the past year, with a market capitalization of $405.83 billion. The stock has traded within a 52-week range of $203.40 to $739.67.

Cambiar's position reflects a nuanced approach to technology exposure. While the fund reduced its overall technology allocation from 11% at the start of 2026 to 8.4% by quarter-end—even as the index's tech weighting surged to 18%—Applied Materials remains a core holding. The fund explains: "Applied Materials, Inc. remains a standout performer, as the company's semiconductor equipment remains in high demand. Given the ongoing buildout of AI compute capacity and critical shortage in associated demand for memory (AMAT CEO stated that some customers are worried about supply into 2030), we continue to maintain exposure to this high-quality business, albeit at a smaller position size."