Cramer's Staged-Entry Plan for AMAT
On the September 1 episode of Mad Money, host Jim Cramer responded to a viewer who said they had bought Applied Materials, Inc. (NASDAQ: AMAT) at $540 in July before the company's earnings release and again at $490, asking how to manage the position. Cramer advised the caller to set aside the prior entry points and focus on the stock's trajectory, noting that shares had fallen roughly $300 from their high. "I would put some on here and then wait till it's down 10%. It could happen. This is a volatile market," Cramer said, framing his comments as a staged buying approach rather than a single full-sized purchase.
Why Applied Materials Has Pulled Back
The article situates the trading advice in Applied Materials' role as a supplier of deposition, etch, and inspection systems used by semiconductor foundries to build advanced logic and memory chips, calling that footprint a key beneficiary of long-term industry infrastructure upgrades. It also flags that semiconductor capital equipment is cyclical, meaning macro shifts, pauses in fab spending, or tighter export constraints can compress valuations quickly even when long-term demand for advanced packaging and chip-making tools is described as strong.
How Investors Are Positioned Heading In
According to Insider Monkey's hedge fund database, 137 funds held Applied Materials positions in the second quarter, down one from 138 in the prior quarter, with Coatue Management listed as the largest holder at more than 4.2 million shares. Short interest was reported at 1.50% of the float, described as limited bearish positioning. The piece ties those data points to Cramer's recommendation by suggesting the institutional backdrop supports the company fundamentally even as the recent decline tests investor patience.
Putting the Playbook Into Practice
The article closes by distilling Cramer's approach into three steps: abandoning attachment to earlier cost bases, purchasing a small tranche at current levels, and reserving cash for a possible additional 10% decline before adding more. Applied Materials shares were indicated up 4.31% in the Yahoo Finance summary accompanying the article, though the source does not attribute that move directly to Cramer's comments.
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