Applied Materials, Inc. (AMAT)
NASDAQ:AMAT
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Applied Materials
(NASDAQ:AMAT)
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Rating:80Outperform
Price Target:
$507.00
â–²(27.73% Upside)
Action:Reiterated
Date:05/15/26
AMAT scores well on strong financial quality (high margins, improving earnings, and manageable leverage) and supportive technical momentum (price above all major moving averages with positive MACD). The latest earnings call reinforced the outlook with strong growth guidance and record results, while valuation is the main constraint (P/E ~28.6 with a low dividend yield).
Positive Factors
High Profitability & Margins
Sustained high gross and net margins indicate strong pricing power, differentiated product mix and operating leverage in capital equipment. These margins support repeat R&D and capacity investment, generate durable cash to fund services growth and shareholder returns over multiple cycles.
Negative Factors
High Capital Intensity
Sizable ongoing capex to expand capacity and support new product ramps constrains near‑term free cash flow despite strong margins. Persistent reinvestment needs increase sensitivity to order cyclicality and can delay free cash flow recovery across semiconductor cycles.
Read all positive and negative factors
Positive Factors
Negative Factors
High Profitability & Margins
Sustained high gross and net margins indicate strong pricing power, differentiated product mix and operating leverage in capital equipment. These margins support repeat R&D and capacity investment, generate durable cash to fund services growth and shareholder returns over multiple cycles.
Read all positive factors
Applied Materials Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
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The Fly
The FlyApplied Materials (AMAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$343.12B
Dividend Yield0.69%
Average Volume (3M)6.91M
Price to Earnings (P/E)28.6
Beta (1Y)1.73
Revenue Growth3.35%
EPS Growth29.52%
CountryUS
Employees36,000
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)10.69
Shares Outstanding793,959,400
10 Day Avg. Volume8,733,516
30 Day Avg. Volume6,911,532
Financial Highlights & Ratios
PEG Ratio76.90
Price to Book (P/B)9.11
Price to Sales (P/S)6.56
P/FCF Ratio32.64
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue11.82
Enterprise Value/Gross Profit24.15
Enterprise Value/Ebitda32.11
Forecast
1Y Price Target
$526.14Price Target Upside32.55% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering29
EPS Forecast (FY)12.14
Revenue Forecast (FY)$33.27B
Applied Materials Business Overview & Revenue Model
Company Description
Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. It operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Ma...
How the Company Makes Money
Applied Materials primarily makes money by selling capital equipment and related offerings that semiconductor and display manufacturers use to build and operate fabrication lines. Its revenue model is mainly business-to-business and is tied to cus...
Applied Materials Earnings Call Summary
Earnings Call Date:May 14, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 13, 2026
Earnings Call Sentiment Positive
The call presented a strongly positive operating picture: record revenue, record EPS, expanding gross and operating margins, robust segment growth (Semiconductor Systems, DRAM, AGS) and confident forward guidance (Q3 and calendar 2026 equipment growth >30%). Management emphasized technology leadership (etch, ALD, advanced packaging, EPIC collaboration) and service monetization via AIx. Offsetting risks include supply-chain and clean-room capacity constraints that require multi-quarter coordination, a digestion period in ICAPS/300mm demand, sizeable ongoing capex that pressures near-term free cash flow, and geopolitical/regulatory exposure tied to China. Overall, the business momentum and visible multi-year demand from AI appear to substantially outweigh these manageable challenges.Positive Updates
Record Quarterly Results
Reported record revenue of $7.91 billion (up 13% sequentially and 11% year-over-year) and record non-GAAP EPS of $2.86 (up 20% year-over-year).
Negative Updates
Supply Chain and Clean-Room Capacity Constraints
Management stated that clean-room space availability had been pacing industry investment and remains a gating factor; company is working with customers and suppliers (rolling 8-quarter forecasts) to address lead times across ~2,000 direct suppliers.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Results
Reported record revenue of $7.91 billion (up 13% sequentially and 11% year-over-year) and record non-GAAP EPS of $2.86 (up 20% year-over-year).
Read all positive updates
Company Guidance
Applied guided Q3 revenue of $8.95 billion ± $500 million (about +23% year‑over‑year) and non‑GAAP EPS of $3.36 ± $0.20 (about +36% YoY), with an expected Semiconductor Systems revenue of roughly $6.9 billion, Applied Global Services ≈ $1.75 billion and Other ≈ $300 million; it modeled non‑GAAP gross margin of ~50.1%, non‑GAAP operating expenses of about $1.485 billion and a non‑GAAP tax rate of ~11%. For the calendar year the company expects semiconductor equipment spending to grow >30%, packaging revenues to grow >50% in 2026, and Applied Global Services to deliver mid‑teens annual growth (potentially higher this year). For context, Q2 results were record: revenue $7.91B (+13% sequential, +11% YoY), non‑GAAP gross margin 50.0% (+80 bps YoY), non‑GAAP operating margin 32.1% (+140 bps YoY), non‑GAAP EPS $2.86 (+20% YoY), with segment revenues of Semiconductor Systems $5.97B, DRAM $1.7B, AGS $1.67B and Other $280M.Applied Materials Financial Statement Overview
Summary
Income Statement
88
Very Positive
Balance Sheet
84
Very Positive
Cash Flow
81
Very Positive
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 29.02B | 28.37B | 27.18B | 26.52B | 25.79B | 23.06B |
| Gross Profit | 14.21B | 13.81B | 12.90B | 12.38B | 11.99B | 10.91B |
| EBITDA | 10.69B | 9.65B | 8.79B | 8.46B | 8.26B | 7.39B |
| Net Income | 8.51B | 7.00B | 7.18B | 6.86B | 6.53B | 5.89B |
Balance Sheet | ||||||
| Total Assets | 40.29B | 36.30B | 34.41B | 30.73B | 26.73B | 25.82B |
| Cash, Cash Equivalents and Short-Term Investments | 8.24B | 8.57B | 9.47B | 6.87B | 2.58B | 5.46B |
| Total Debt | 6.46B | 7.05B | 6.61B | 6.00B | 5.83B | 5.75B |
| Total Liabilities | 16.38B | 15.88B | 15.41B | 14.38B | 14.53B | 13.58B |
| Stockholders Equity | 23.91B | 20.41B | 19.00B | 16.35B | 12.19B | 12.25B |
Cash Flow | ||||||
| Free Cash Flow | 5.96B | 5.70B | 7.49B | 7.59B | 4.61B | 4.77B |
| Operating Cash Flow | 7.99B | 7.96B | 8.68B | 8.70B | 5.40B | 5.44B |
| Investing Cash Flow | -2.71B | -2.78B | -2.33B | -1.53B | -1.36B | -1.22B |
| Financing Cash Flow | -3.29B | -5.98B | -4.47B | -3.03B | -7.04B | -4.59B |
Applied Materials Technical Analysis
Positive
396.94
Price Trends
388.52
Positive
358.79
Positive
286.52
Positive
Market Momentum
11.19
Positive
58.08
Neutral
61.17
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 396.94 is below the 20-day moving average (MA) of 415.76, above the 50-day MA of 388.52, and above the 200-day MA of 286.52, indicating a bullish trend. The MACD of 11.19 indicates Positive momentum. The RSI at 58.08 is Neutral, neither overbought nor oversold. The STOCH value of 61.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AMAT.
Applied Materials Risk Analysis
Applied Materials disclosed 24 risk factors in its most recent earnings report. Applied Materials reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Applied Materials Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $626.18B | 39.94 | 51.97% | 0.63% | 18.56% | 26.42% | |
81 Outperform | $246.67B | 40.12 | 89.07% | 0.58% | 13.43% | 28.40% | |
81 Outperform | $381.86B | 34.22 | 65.79% | 0.56% | 26.53% | 47.73% | |
80 Outperform | $343.12B | 28.64 | 39.78% | 0.69% | 3.35% | 29.52% | |
74 Outperform | $56.11B | 27.09 | 29.72% | 0.24% | 30.33% | 51.65% | |
68 Neutral | $78.29B | 26.48 | 14.45% | 2.29% | 15.55% | 43.35% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
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Applied Materials Corporate Events
Executive/Board ChangesShareholder Meetings
Applied Materials Shareholders Reaffirm Board, Pay and Auditor
Positive
Mar 13, 2026
At its Annual Meeting of Shareholders held on March 12, 2026, Applied Materials, Inc. saw all ten board nominees, including CEO Gary E. Dickerson, re-elected to one-year terms, signaling broad investor support for the company’s current gover...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.