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Every chip in your phone, your laptop and the data centers behind ChatGPT and Claude was made on machines like Applied Materials’. When chipmakers build, Applied sells. Analysts expect a building boom: sales from about $31 billion over the last 12 months to $47 billion in the year to October 2027, and $57 billion the year after.

Yet the stock’s price-to-sales multiple peaked at about 20 on June 30 and is about 9.5 now. That’s the anomaly: growth expected to speed up, valuation cut in half.

That gap reaches far beyond chip investors. Applied sits inside S&P 500 index funds, so a portfolio of a few million dollars often owns it, and the chip cycle,…