Should You Consider Adding Applied Materials (AMAT) to Your Portfolio?

Vltava Fund, an investment management company, recently released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. It has been 16 years since the fund transitioned from its initial investment strategy to the current one. Throughout this entire time, the fund has achieved an average annual return of 12%. The letter discussed about the book Hidden Investment Treasures by Daniel Gladiš. The investment cases outlined in Hidden Investment Treasures account for over 80% of Vltava Fund’s current portfolio. This document offers a thorough and detailed overview of the fund’s joint holdings and the reasons behind investment choices. In addition, please check the fund’s top five holdings to know its best picks in 2024.

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Vltava Fund highlighted stocks like Applied Materials, Inc. (NASDAQ:AMAT), in the fourth quarter 2024 investor letter. Applied Materials, Inc. (NASDAQ:AMAT) offers manufacturing equipment, services, and software to the semiconductor, display, and related industries. The one-month return of Applied Materials, Inc. (NASDAQ:AMAT) was 5.74%, and its shares gained 17.74% of their value over the last 52 weeks. On January 7, 2025, Applied Materials, Inc. (NASDAQ:AMAT) stock closed at $177.82 per share with a market capitalization of $144.689 billion.

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Vltava Fund stated the following regarding Applied Materials, Inc. (NASDAQ:AMAT) in its Q4 2024 investor letter:

“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials, Inc. (NASDAQ:AMAT) and Lam Research. Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.

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