Applied Materials (AMAT) AI Stock Analysis

• Market Cap: $181.35B
• Dividend Yield: 0.74%
• Average Volume (3M): 9.04M
• Price to Earnings (P/E): 27.1
• Beta (1Y): 1.77
• Revenue Growth: 6.70%
• EPS Growth: -5.95%
• Country: US
• Employees: 36,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 2.48
• Shares Outstanding: 796,642,460
• 10 Day Avg. Volume: 6,705,268
• 30 Day Avg. Volume: 9,041,136
• PEG Ratio: 3.35
• Price to Book (P/B): 8.07
• Price to Sales (P/S): 5.64
• P/FCF Ratio: 20.47
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 5.20
• Enterprise Value/Gross Profit: 10.71
• Enterprise Value/Ebitda: 16.03
• 1Y Price Target: $212.61
• Price Target Upside: -8.09% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 27

• Rating: 77 Outperform
• Price Target: $257.00 ▲(11.10% Upside)

Applied Materials' strong financial performance and positive technical indicators are key strengths, supported by robust earnings despite short-term challenges in China. The high P/E ratio suggests a premium valuation, which may limit upside potential. The company's strategic focus on AI and advanced packaging positions it well for long-term growth.

Positive Factors

Advanced Packaging Growth

Applied Materials' focus on advanced packaging positions it for significant growth, leveraging demand for integrated systems that enhance chip performance.

Investment in U.S. Manufacturing

Continued investment in U.S. manufacturing strengthens Applied Materials' domestic production capabilities, aligning with geopolitical trends favoring local supply chains.

New Semiconductor Systems

The introduction of new semiconductor systems enhances Applied Materials' competitive edge in AI chip manufacturing, supporting long-term growth in a key technology sector.

Negative Factors

Export Restrictions Impact

New U.S. export restrictions limit Applied Materials' ability to sell to certain Chinese customers, impacting revenue and highlighting geopolitical risks.

Uncertainties in China Business

Challenges in the China market, including capacity digestion and export license delays, create revenue uncertainty, affecting short-term financial performance.

Nonlinear Demand from Leading-Edge Customers

Reduced demand from leading-edge customers due to market dynamics affects Applied Materials' order visibility, potentially impacting future revenue streams.

Applied Materials Business Overview & Revenue Model

Company Description

Applied Materials, Inc. is a leading provider of equipment, services, and software for the semiconductor, flat panel display, and solar industries. The company operates primarily in the semiconductor fabrication sector, offering innovative solutions that enable the manufacturing of advanced microchips used in various electronic devices. Their core products include semiconductor manufacturing equipment, materials, and technology services that enhance production efficiency and yield in chip fabrication processes.

How the Company Makes Money

Applied Materials generates revenue primarily through the sale of semiconductor manufacturing equipment, which constitutes a significant portion of its income. The company also earns money from services and support agreements, offering maintenance, upgrades, and consulting to customers in the semiconductor and display industries. Key revenue streams include systems sales, which involve selling equipment, and services revenue from ongoing support and upgrades. Additionally, Applied Materials benefits from strategic partnerships with leading technology firms, collaborations in research and development, and an increasing demand for advanced manufacturing capabilities in the semiconductor industry, particularly as the global demand for electronic devices continues to grow.

Applied Materials Financial Statement Overview

Summary

Applied Materials exhibits strong financial health with consistent profitability and efficient cash management. Despite a slowdown in revenue growth, the company maintains solid margins and a stable balance sheet. Moderate leverage and strong return on equity highlight effective financial management.

Income Statement

Applied Materials demonstrates strong profitability with a consistent gross profit margin around 48% and a net profit margin of approximately 24% in the TTM period. Revenue growth has slowed to 1.87% in the TTM, indicating a potential plateau after previous years of robust growth. The EBIT and EBITDA margins remain healthy, reflecting efficient operational management.

Balance Sheet

The company maintains a stable financial position with a debt-to-equity ratio of 0.35, indicating moderate leverage. Return on equity is strong at 35.84%, showcasing effective use of shareholder funds. The equity ratio is solid, reflecting a well-capitalized balance sheet, though there is a slight increase in debt over the years.

Cash Flow

Cash flow generation is robust, with an operating cash flow to net income ratio of 0.93 in the TTM, indicating strong cash conversion. Free cash flow growth is stagnant, but the free cash flow to net income ratio remains healthy at 0.79, suggesting efficient cash management despite recent growth challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2019
Income Statement
Total Revenue	28.61B	27.18B	26.52B	25.79B	23.06B	14.61B
Gross Profit	13.88B	12.90B	12.38B	11.99B	10.91B	6.39B
EBITDA	9.27B	8.79B	8.46B	8.26B	7.39B	3.87B
Net Income	6.83B	7.18B	6.86B	6.53B	5.89B	2.71B
Balance Sheet
Total Assets	34.21B	34.41B	30.73B	26.73B	25.82B	19.04B
Cash, Cash Equivalents and Short-Term Investments	7.01B	9.47B	6.87B	2.58B	5.46B	3.62B
Total Debt	6.76B	6.61B	6.00B	5.83B	5.75B	5.31B
Total Liabilities	14.71B	15.41B	14.38B	14.53B	13.58B	10.81B
Stockholders Equity	19.50B	19.00B	16.35B	12.19B	12.25B	8.21B
Cash Flow
Free Cash Flow	5.86B	7.49B	7.59B	4.61B	4.77B	2.81B
Operating Cash Flow	7.46B	8.68B	8.70B	5.40B	5.44B	3.25B
Investing Cash Flow	-2.41B	-2.33B	-1.53B	-1.36B	-1.22B	-443.00M
Financing Cash Flow	-5.98B	-4.47B	-3.03B	-7.04B	-4.59B	-3.12B

Applied Materials Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 231.33
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMAT, the sentiment is Positive. The current price of 231.33 is above the 20-day moving average (MA) of 222.55, above the 50-day MA of 193.85, and above the 200-day MA of 174.07, indicating a bullish trend. The MACD of 9.03 indicates Positive momentum. The RSI at 61.06 is Neutral, neither overbought nor oversold. The STOCH value of 72.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AMAT.

Applied Materials Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KLAC	―	$158.82B	39.71	100.78%	0.59%	24.04%	49.69%
AMAT	―	$181.35B	27.14	35.64%	0.74%	6.70%	-5.95%
LRCX	―	$195.46B	34.29	62.26%	0.61%	25.66%	46.68%
ADI	―	$117.09B	60.55	5.65%	1.60%	7.08%	18.39%
ASX	―	$28.87B	27.23	10.97%	2.69%	4.86%	6.44%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INTC	―	$193.96B	2,987.77	0.19%	―	-1.49%	―

Applied Materials Corporate Events

Applied Materials Faces New Export Restrictions Impact

On September 29, 2025, the U.S. Department of Commerce’s Bureau of Industry and Security issued a new rule expanding export restrictions, impacting Applied Materials‘ ability to export certain products to China-based customers. This rule is expected to reduce Applied Materials’ net revenue by approximately $110 million in the fourth quarter of fiscal 2025 and by $600 million in fiscal 2026, highlighting significant financial implications for the company.

The most recent analyst rating on (AMAT) stock is a Buy with a $240.00 price target. To see the full list of analyst forecasts on Applied Materials stock, see the AMAT Stock Forecast page.

Applied Materials Secures $2 Billion Credit Facility

On September 25, 2025, Applied Materials entered into a credit agreement for a $2.0 billion revolving credit facility with Bank of America, allowing for potential expansion up to $3.0 billion. This agreement, which includes various interest rate options and covenants, is intended for general corporate purposes and reflects Applied’s strategic financial planning to support its operations and growth.

The most recent analyst rating on (AMAT) stock is a Buy with a $220.00 price target. To see the full list of analyst forecasts on Applied Materials stock, see the AMAT Stock Forecast page.

Applied Materials Completes $1 Billion Notes Offering

On September 18, 2025, Applied Materials completed a public offering of $1 billion in senior unsecured notes, with $550 million due in 2031 and $450 million due in 2036. The proceeds will be used to repay existing debt and for general corporate purposes, enhancing the company’s financial flexibility. The issuance includes covenants that restrict certain financial activities, and the notes may be subject to repurchase or redemption under specific conditions.

The most recent analyst rating on (AMAT) stock is a Buy with a $196.00 price target. To see the full list of analyst forecasts on Applied Materials stock, see the AMAT Stock Forecast page.

Yvonne McGill Resigns from Applied Materials Board

Yvonne McGill resigned from the Board of Directors of Applied Materials, Inc., effective September 12, 2025. Her resignation was not due to any disagreement with the company’s operations, policies, or practices.

The most recent analyst rating on (AMAT) stock is a Hold with a $175.00 price target. To see the full list of analyst forecasts on Applied Materials stock, see the AMAT Stock Forecast page.

Applied Materials Reports Record Q3 Amid China Challenges

In the latest earnings call, Applied Materials, Inc. expressed a positive sentiment overall, highlighting record performance and growth in several key areas such as DRAM, advanced packaging, and U.S. manufacturing investments. Despite facing challenges in China and nonlinear demand from leading-edge customers that impact short-term visibility and guidance for Q4, the company remains optimistic about its long-term growth opportunities and market position.

Applied Materials, Inc. Navigates Trade Policy Challenges Amid Rising Tariffs and Global Disputes

Applied Materials, Inc. faces significant risks due to recent changes in trade policies, including increased tariffs and ongoing trade disputes, particularly between the United States and other countries. These developments have introduced substantial uncertainty, leading to retaliatory tariffs that increase costs and complicate supply chains. The company’s reliance on international customers and suppliers exacerbates these challenges, potentially reducing product competitiveness and customer demand. Despite efforts to mitigate these impacts, the company may still experience adverse effects on its business operations and financial performance.

Applied Materials Reports Record Q3 2025 Earnings

Applied Materials, Inc. is a leading company in the materials engineering solutions sector, primarily serving the semiconductor and advanced display industries with innovative technology solutions.