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Applied Materials
(NASDAQ:AMAT)
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Rating:80Outperform
Price Target:
$831.00
â–²(109.35% Upside)
Action:Reiterated
Date:06/13/26
The score is driven primarily by strong financial performance and a very positive earnings outlook with record results and robust forward guidance. Technicals support the trend but are near overbought levels, while the high P/E and low dividend yield meaningfully temper the overall score.
Positive Factors
Technology & Process Leadership
Sustained leadership in etch and process control creates high technical barriers and long qualification cycles, anchoring multi-year tool demand and pricing power. Fast product ramps (Sym3) indicate strong customer adoption and embed AMAT into critical fab process flows, supporting durable competitive advantage.
Negative Factors
Cyclical Equipment Revenue Profile
A material portion of revenue depends on capital expenditure cycles and node transitions, making top-line growth lumpy. Modest recent revenue growth implies greater sensitivity to cyclical downswings; prolonged capex moderation would quickly depress tool orders and margin leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
Technology & Process Leadership
Sustained leadership in etch and process control creates high technical barriers and long qualification cycles, anchoring multi-year tool demand and pricing power. Fast product ramps (Sym3) indicate strong customer adoption and embed AMAT into critical fab process flows, supporting durable competitive advantage.
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.
Data provided by:
The Fly
The FlyApplied Materials (AMAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$478.79B
Dividend Yield0.69%
Average Volume (3M)9.27M
Price to Earnings (P/E)56.4
Beta (1Y)1.67
Revenue Growth3.35%
EPS Growth29.52%
CountryUS
Employees36,500
SectorGeneral
Sector StrengthN/A
IndustrySemiconductors
Share Statistics
EPS (TTM)10.69
Shares Outstanding793,959,400
10 Day Avg. Volume11,494,972
30 Day Avg. Volume9,269,970
Financial Highlights & Ratios
PEG Ratio76.84
Price to Book (P/B)9.11
Price to Sales (P/S)6.56
P/FCF Ratio32.64
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue16.22
Enterprise Value/Gross Profit33.14
Enterprise Value/Ebitda42.26
Forecast
1Y Price Target
$604.70Price Target Upside52.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering29
EPS Forecast (FY)12.24
Revenue Forecast (FY)$33.36B
Applied Materials Business Overview & Revenue Model
Company Description
Applied Materials, Inc. engages in provision of materials engineering solutions used to produce semiconductors. The firm also focuses on design, development, production, and servicing of the critical wafer fabrication tools used for customers to m...
How the Company Makes Money
Applied Materials primarily makes money by selling capital equipment used in semiconductor and display manufacturing, along with recurring revenue from services tied to its large installed base of tools. Key revenue streams include: (1) Semiconduc...
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 | 11.14B | 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
489.97
Positive
425.50
Positive
338.75
Positive
Market Momentum
51.49
Negative
53.97
Neutral
52.59
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 585.42, below the 50-day MA of 489.97, and above the 200-day MA of 338.75, indicating a bullish trend. The MACD of 51.49 indicates Negative momentum. The RSI at 53.97 is Neutral, neither overbought nor oversold. The STOCH value of 52.59 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 (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $689.66B | 60.94 | 51.97% | 0.63% | 18.56% | 26.42% | |
80 Outperform | $478.79B | 56.41 | 39.78% | 0.69% | 3.35% | 29.52% | |
78 Outperform | $339.06B | 7.28 | 89.07% | 0.58% | 13.43% | 28.40% | |
78 Outperform | $439.46B | 66.05 | 65.79% | 0.56% | 26.53% | 47.73% | |
78 Outperform | $68.55B | 80.20 | 29.72% | 0.24% | 30.33% | 51.65% | |
62 Neutral | $93.70B | 67.00 | 14.45% | 2.29% | 15.55% | 43.35% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
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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.