1 Stock to Buy, 1 Stock to Sell This Week: Applied Materials, Alibaba

• U.S. inflation data, retail sales, U.S.-Iran developments and the Trump-Xi summit could dominate the coming week.
• Applied Materials stands out as the stock to buy, driven by its strong positioning in the semiconductor equipment market amid surging demand for AI infrastructure.
• Alibaba emerges as the one to sell, as its upcoming results highlight ongoing challenges in a competitive and regulated environment.

U.S. stocks closed higher on Friday, with the and the Nasdaq notching new record peaks thanks to strong gains in Micron, Sandisk, Intel and other AI-related stocks, while a solid jobs report pointed to labor market resilience.

Source: Investing.com

All three major averages posted weekly gains. The Nasdaq jumped 4.5%, while the S&P 500 rose 2.3%. Both recorded their sixth straight winning week, marking their longest win streak since October 2024. The Dow Jones Industrial Average tacked on 0.2% for the period.

The rallying stock market will take its cues next week from inflation and consumer spending data, developments in the war in Iran, and a high-stakes meeting between the leaders of the U.S. and China.

President Donald Trump will travel to Beijing to meet with China’s Xi Jinping on May 14-15, marking the first visit by a U.S. leader to the Chinese capital in nearly a decade.

Meanwhile, on the economic calendar, most important will be Tuesday’s U.S. consumer price inflation report, which is forecast to show headline annual CPI rising 3.7% year-over-year in April.

Source: Investing.com

The CPI data will be accompanied by the release of the latest figures on producer prices on Wednesday, while retail sales data will be out on Thursday.

Elsewhere, the earnings season cools considerably in the week ahead. Cisco Systems, , Nebius, Oklo, Hims Hers Health, Circle Internet, Klarna, Barrick Mining, and are notable reports.

Regardless of which direction the market goes, below I highlight one stock likely to be in demand and another which could see fresh downside. Remember though, my timeframe is just for the week ahead, Monday, May 11 – Friday, May 15.

Stock To Buy: Applied Materials 

Applied Materials, the world’s largest semiconductor equipment supplier, is poised to deliver a strong quarterly report fueled by the unrelenting demand for advanced chipmaking tools.

AMAT is scheduled to deliver its fiscal second quarter update on Thursday at 4:00PM EST. The expected move in the options market post-earnings is about +/-8.7% up or down.

Source: InvestingPro

Applied Materials is seen earning an adjusted $2.68 per share for the March-ended quarter, marking a 12% increase from the prior year. Meanwhile, revenue is forecast to jump 8% year-over-year to $7.68 billion.

Analyst sentiment has been notably positive heading into the print. According to InvestingPro data, all 23 of the latest analyst revisions were made to the upside, highlighting confidence in the company’s continued expansion.

Applied Materials, a leader in providing manufacturing equipment and services for semiconductors, continues to benefit from robust industry investments in advanced chips, particularly those powering artificial intelligence.

Source: Investing.com

AMAT stock has surged to within whiskers of its all-time high, closing at $435.44 on Friday. The technical backbone remains bullish: SuperTrend support holds, Ichimoku cloud is fully green, and the MACD continues to widen in bulls’ favor.

Recent analyst upgrades reinforce confidence, with firms like HSBC initiating coverage at Buy with a $517 price target, citing strong wafer fab equipment demand.

A beat or upbeat guidance on AI-related orders could spark further upside this week.

Trade Setup:

• Entry: ~$436.00
• Exit Target: $462.00 (gain +6%)
• Stop-Loss: $419.00 (risk -3.9%)

Stock to Sell: Alibaba

In contrast, Alibaba represents the stock to consider selling ahead of its March quarter earnings on Thursday. While the e-commerce and cloud giant maintains significant scale, it faces persistent headwinds including margin pressures from heavy investments in AI and cloud, slower growth in core segments, and broader macroeconomic uncertainties in China.

Analysts have grown increasingly cautious on BABA ahead of the print, with 13 of the last 14 revisions being made to the downside. The options market is pricing in a potential move of +/-7.3% for shares post-earnings.

Source: InvestingPro

Consensus estimates call for the Hangzhou, China-based tech giant to announce earnings per share of ¥7.11 ($1.05) on revenue of ¥247.20 billion ($36.3 billion).

Despite trading at a seemingly attractive valuation, the company faces a multi-front battle: intensifying competition in Chinese e-commerce from rivals like PDD Holdings, a sluggish economic recovery in China, and ongoing regulatory scrutiny from Beijing.

Furthermore, its cloud division, once a promising growth engine, has struggled to retain market share amid heightened domestic competition. At the same time, delisting chatter continue to hang over U.S.-listed Chinese equities, limiting the multiple that investors are willing to pay even when fundamentals improve.

Source: Investing.com

Now at $140.06, BABA stock is pushing directly into a dense resistance band defined by the Ichimoku cloud ($135.74–$140.06) and the critical 50–61.8% Fibonacci retracement ($138.33–$143.14) of its February–April decline.

Despite a 27% upside implied by analyst targets and a strong “Buy” consensus, the near-term setup looks fraught.

Trade Setup:

• Entry: ~$140.00
• Exit Target: $129.00 (gain +7.8%)
• Stop-Loss: $145.85 (risk -4.2%)

Disclosure: This is not financial advice. Always conduct your own research. 

At the time of writing, I am long on the S&P 500, and the via the , and the Invesco QQQ Trust ETF. I am also long on the Technology Select Sector SPDR ETF. I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials. 

The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.

Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.