Two Very Different Charts, One Compelling AI Trade

The stock market closed out June on a high note on June 30, 2026, with the Dow Jones Industrial Average hitting an all-time high of 52,182.74. But underneath that record, two very different stories were playing out — and both could represent opportunity for investors who know where to look.

Applied Materials (AMAT) surged 5.32% on June 30 alone, trading at $731.57 per share. Meanwhile, Microsoft (MSFT) was grinding near its 52-week lows, trading at $370.79 — down more than 33.2% from its 52-week high of $555.45. Two stocks in the same AI-driven economy, headed in opposite directions. The question for investors is whether either — or both — makes sense as a buy right now.

Applied Materials: The AI Equipment Supercycle Is Real

Applied Materials makes the chip-manufacturing equipment that semiconductor fabs need to produce the AI processors powering everything from data centers to autonomous vehicles. When demand for chips accelerates, AMAT is one of the first to benefit.

That dynamic is showing up clearly in the numbers. In the company's most recently reported quarter (Q2 fiscal year 2026, reported April 26, 2026), Applied Materials posted revenue of $7.91B — up from $7.01$7.01B in the prior quarter — with net income of $2.81B and diluted earnings per share of $3.51. Gross margins came in at 49.9%, and net margins at 35.5%, reflecting the pricing power that comes with being one of the few companies in the world that can supply leading-edge deposition and etch equipment.

The stock's one-year chart tells an even more dramatic story. From a 52-week low of $154.47 to its current price near $731.57, Applied Materials has gained roughly 373.6% off that low — an extraordinary run driven by hyperscaler capital spending on AI infrastructure.

Wall Street analysts have been scrambling to keep up with the move. Susquehanna raised its price target to $900.00 on June 30, 2026, while Cantor Fitzgerald recently set a target of $850.00. Keybanc is at $750.00. Across all 22 analysts covering the stock, 100% carry bullish ratings, with an average price target of $618.50. That average lags the current stock price because most formal targets predate the recent surge — the high target of $900.00 from Susquehanna, issued today, implies meaningful upside from current levels.

At a P/E ratio of 73.97 on trailing earnings of $9.89 per share, AMAT is not a cheap stock. But investors are paying for future earnings, not past ones. With AI infrastructure spending showing no signs of slowing, the company's next earnings report — expected around August 13, 2026 — could provide the next catalyst.

Microsoft: The Tech Giant That Got Left Behind

Microsoft is a different kind of story. The company has not done anything fundamentally wrong — it is, by most measures, firing on all cylinders. Its most recently reported quarter, Q3 fiscal year 2026 (ended March 31, 2026), showed revenue of $82.89B, net income of $31.78B, and diluted EPS of $4.27. Gross margins sit at 67.6% and net margins at 38.3% — some of the best profitability numbers in the entire large-cap technology sector. The company carries a market cap of $2.75T.

So why is the stock trading near a 52-week low of $349.20, currently at just $370.79?

The market has been punishing Microsoft for its massive AI spending commitments. Investors have worried that the billions being poured into Copilot integrations, Azure AI infrastructure, and OpenAI-related initiatives will take time to translate into meaningful revenue growth. That concern has weighed on the stock through most of the first half of 2026.

But here is what makes MSFT interesting at these levels: the analysts have not bailed. Of the 26 analysts covering the stock, 96.2% maintain bullish ratings. The average price target is $557.88, representing roughly 50.5% upside from the current price. The highest target on the Street sits at $680.00. On a trailing P/E basis, Microsoft trades at just 22.90 times earnings of $16.19 per share — its cheapest multiple in years for a company generating more than $31.00 billion per quarter in net income.

Q4 fiscal year 2026 earnings are expected in mid-July 2026. That report — particularly Azure growth commentary and any Copilot revenue disclosure — will be closely watched as a potential re-rating event.

The AI Trade From Two Different Angles

Applied Materials and Microsoft represent two ends of the same AI investment thesis. AMAT is the pick-and-shovel play: it makes the tools that build the chips, and it is already trading at elevated multiples to reflect that momentum. Microsoft is the software layer play: it has the distribution, the enterprise relationships, and the AI products — it just needs the market to believe the ROI will materialize.

Whether investors lean toward the surging equipment maker or the battered software giant, both stories trace back to the same underlying force: the ongoing buildout of AI infrastructure across the global economy.