AMAT Outpaces SMH Ahead of Earnings; Options Trade Discussed

Bullish Gator

Applied Materials has outperformed SMH over 12 months; consolidation ahead of Thursday after-hours earnings and an example options trade are examined.

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What stands out

Rick Ducat notes a quietly important setup: Applied Materials (AMAT) has outperformed the VanEck Semiconductor exchange-traded fund (ETF) (SMH) over the last year, yet the stock is now compressing into a neat consolidation ahead of earnings after Thursday's close and he walks through an example options trade around that configuration. For traders, it matters because steady outperformance plus low visible volatility can hide crowded positioning and leave option premiums vulnerable to an earnings surprise. For investors, the comparison to AI peers underlines that AMAT’s move is incremental rather than a headline-grabbing rerating.