Applied Materials Inc. (AMAT) saw its stock price soar 5.10% during intraday trading on Tuesday, reflecting strong bullish sentiment towards the semiconductor equipment leader.

The surge aligns with broad strength across the chip sector. Other semiconductor stocks, including Micron Technology, also posted significant gains following Micron's announcement of plans to build a $24-billion chip manufacturing plant in Singapore, a move expected to increase demand for semiconductor manufacturing equipment.

Further supporting the positive outlook, reports emerged that Japan and the United States are advancing plans to construct a synthetic diamond factory in the US to build a resilient supply chain for this critical chip manufacturing material. Additionally, a UBS analysis noted that rare earth elements—essential for advanced hardware—pose no existential risk to the AI semiconductor value chain at present, and specifically advised against reducing exposure to semi-cap equipment companies like Applied Materials.