- Key macro drivers for the coming week include U.S. inflation figures, retail sales data, geopolitical developments between the U.S. and Iran, and the anticipated Trump–Xi summit.
- In this context, Applied Materials is highlighted as a buy, supported by its strong exposure to semiconductor equipment demand, which continues to benefit from accelerating AI infrastructure investment.
- Conversely, Alibaba is flagged as a sell, with its upcoming earnings expected to underscore persistent headwinds from intense competition and a challenging regulatory environment.
U.S. equities finished the week on a strong note Friday, with both the S&P 500 and Nasdaq setting fresh record highs. Gains were led by AI-linked semiconductor names such as Micron, Sandisk, and Intel, while upbeat labor data reinforced expectations of continued resilience in the U.S. job market.
All three major U.S. equity benchmarks ended the week higher. The Nasdaq Composite surged 4.5%, while the S&P 500 climbed 2.3%. Both indices extended their winning streak to six consecutive weeks, the longest since October 2024. The Dow Jones Industrial Average added a modest 0.2% over the same period.
Looking ahead, market sentiment is expected to be shaped by key catalysts including inflation data, consumer spending trends, geopolitical developments in the Iran conflict, and a closely watched summit between the United States and China.
U.S. President Donald Trump is scheduled to visit Beijing on May 14–15 for a meeting with Chinese President Xi Jinping, marking the first visit by a sitting U.S. president to China in nearly a decade.
On the economic front, attention will center on Tuesday’s U.S. Consumer Price Index report, which is expected to show headline inflation rising 3.7% year-on-year in April.
The upcoming week features a dense macro calendar, with CPI data on Tuesday followed by producer price figures on Wednesday and retail sales on Thursday, all of which will shape expectations for inflation trends and consumer demand.
On the corporate side, earnings activity slows but remains notable. Key reports include Cisco Systems, Applied Materials, Nebius, Oklo, Hims & Hers Health, Circle Internet Group, Klarna, Barrick Mining, and Alibaba Group.
Overall, the outlook remains highly event-driven, and regardless of market direction, attention is centered on identifying one stock likely to attract buying interest versus another that could face renewed selling pressure over the Monday, May 11 to Friday, May 15 trading week.
Stock to Buy: Applied Materials
Applied Materials, the world’s largest semiconductor equipment supplier, is positioned for a potentially strong quarterly performance, driven by sustained demand for advanced chip manufacturing tools amid ongoing AI infrastructure expansion.
The company is set to report fiscal second-quarter results on Thursday at 4:00 PM EST. Market expectations imply a relatively large post-earnings swing, with options pricing in an approximate move of around ±8.7%.
Given its exposure to the semiconductor capex cycle and AI-related investment trends, Applied Materials is likely to remain in focus into the report and could see heightened trading activity around the earnings release.
Applied Materials is expected to report adjusted earnings of $2.68 per share for the March-ended quarter, representing roughly 12% year-over-year growth. Revenue is projected to increase 8% to about $7.68 billion.
Sentiment heading into the results is strongly positive, with analyst revisions skewing decisively upward. According to InvestingPro data, all 23 recent estimate revisions have been raised, underscoring growing confidence in the company’s momentum and continued expansion within the semiconductor equipment cycle.
Applied Materials, a leading provider of semiconductor manufacturing equipment and services, continues to benefit from strong industry capital expenditure, especially tied to advanced chip technologies.
Demand remains particularly supported by ongoing investment in artificial intelligence infrastructure, where advanced semiconductors are a key enabling layer, helping reinforce the company’s positioning in a structurally growing end-market.
Applied Materials has rallied to near its all-time high, closing at $435.44 on Friday. The technical picture remains firmly bullish, with SuperTrend support intact, the Ichimoku cloud still green, and MACD momentum continuing to expand in favor of buyers.
Recent analyst action has further supported sentiment, including HSBC initiating coverage at Buy with a $517 price target, driven by expectations of sustained demand for wafer fabrication equipment linked to AI investment cycles.
Markets will now be watching this week’s earnings closely, as a beat or stronger-than-expected guidance—particularly around AI-related orders—could act as a catalyst for another leg higher.
Trade setup summary:
- Entry: around $436.00
- Target: $462.00 (≈ +6%)
- Stop-loss: $419.00 (≈ -3.9%)
Sell Recommendation: Alibaba Group
In contrast, Alibaba Group is viewed as a potential sell heading into its March-quarter earnings release on Thursday. Despite its strong scale in e-commerce and cloud services, the company continues to face challenges such as margin pressure from ongoing heavy investment in AI and cloud infrastructure, weaker momentum in its core businesses, and a difficult macroeconomic backdrop in China.
Sentiment among analysts has also turned more cautious ahead of the results, with 13 of the last 14 estimate revisions moving lower. Meanwhile, options markets are currently pricing in an expected post-earnings share move of about ±7.3%.
Consensus estimates expect the Alibaba Group to report earnings per share of ¥7.11 ($1.05) on revenue of about ¥247.20 billion ($36.3 billion) for the quarter.
Although the stock may look inexpensive on a valuation basis, it is facing pressure from several directions. Competition in China’s e-commerce space is intensifying, particularly from players such as PDD Holdings, while the domestic economic recovery remains uneven and consumer demand relatively muted. In addition, regulatory oversight from Beijing continues to be a structural overhang.
Its cloud business—previously seen as a key long-term growth driver—has also come under strain, with rising domestic rivals eroding momentum and market share. On top of that, recurring concerns around potential delisting risk for U.S.-listed Chinese companies continue to weigh on investor sentiment, limiting valuation expansion even when operational performance stabilizes or improves.
Alibaba Group is currently trading around $140.06 and is pressing into a technically significant resistance zone. This area is defined by the lower boundary of the Ichimoku cloud ($135.74–$140.06) as well as a key Fibonacci retracement cluster between 50% and 61.8% ($138.33–$143.14) drawn from its February–April decline.
While the broader analyst outlook remains constructive—with consensus implying roughly 27% upside and a generally “Buy” rating—the short-term technical picture appears more fragile, with price action stalling at a heavy confluence of resistance.
Trade structure implied:
- Suggested entry: around $140.00
- Target: $129.00 (roughly +7.8% move if short is realized)
- Stop-loss: $145.85 (about -4.2% risk)
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