Applied Materials (AMAT) AI Stock Analysis

• Market Cap: $163.27B
• Dividend Yield: 0.79%
• Average Volume (3M): 8.31M
• Price to Earnings (P/E): 24.4
• Beta (1Y): 1.76
• 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: 10,735,318
• 30 Day Avg. Volume: 8,305,728
• 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: 0.91
• Enterprise Value/Revenue: 5.20
• Enterprise Value/Gross Profit: 10.71
• Enterprise Value/Ebitda: 16.03
• 1Y Price Target: $196.04
• Price Target Upside: -9.97% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 28

• Rating: 76 Outperform
• Price Target: $196.00 ▼(-9.98% Downside)

Applied Materials' strong financial performance and reasonable valuation are key strengths, supporting a solid overall score. The earnings call provides optimism for long-term growth despite short-term challenges in China. Technical analysis presents mixed signals, with potential bearish momentum and overbought conditions.

Positive Factors

Strong Financial Health

The company's strong financial health, marked by consistent profitability and efficient cash management, ensures resilience and supports future growth initiatives.

Advanced Packaging Growth

The significant growth in the advanced packaging segment positions Applied Materials to capitalize on increasing demand for sophisticated semiconductor solutions.

Service Business Expansion

Continuous growth in the service business, driven by subscription revenue, provides a stable income stream and enhances customer retention.

Negative Factors

Uncertainties in China Business

Ongoing uncertainties in China, including capacity digestion and export license delays, could hinder revenue growth and affect market stability.

Nonlinear Demand from Leading-Edge Customers

Reduced demand from leading-edge customers due to market concentration and timing issues may impact short-term revenue visibility and growth.

Lower Visibility and Guidance for Q4 2025

The expected decline in Q4 revenue and earnings highlights challenges in maintaining growth momentum, affecting investor confidence and strategic planning.

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 Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits. This segment also offers various technologies, including epitaxy, ion implantation, oxidation/nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective deposition and removal, as well as metrology and inspection tools. The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity comprising spares, upgrades, services, remanufactured earlier generation equipment, and factory automation software for semiconductor, display, and other products. The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays; organic light-emitting diodes; and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smart phones, and other consumer-oriented devices. The company operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. Applied Materials, Inc. was incorporated in 1967 and is headquartered in Santa Clara, California.

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 2020
Income Statement
Total Revenue	28.61B	27.18B	26.52B	25.79B	23.06B	17.20B
Gross Profit	13.88B	12.90B	12.38B	11.99B	10.91B	7.69B
EBITDA	9.27B	8.79B	8.46B	8.26B	7.39B	4.78B
Net Income	6.83B	7.18B	6.86B	6.53B	5.89B	3.62B
Balance Sheet
Total Assets	34.21B	34.41B	30.73B	26.73B	25.82B	22.35B
Cash, Cash Equivalents and Short-Term Investments	7.01B	9.47B	6.87B	2.58B	5.46B	5.74B
Total Debt	6.76B	6.61B	6.00B	5.83B	5.75B	5.71B
Total Liabilities	14.71B	15.41B	14.38B	14.53B	13.58B	11.78B
Stockholders Equity	19.50B	19.00B	16.35B	12.19B	12.25B	10.58B
Cash Flow
Free Cash Flow	5.86B	7.49B	7.59B	4.61B	4.77B	3.38B
Operating Cash Flow	7.46B	8.68B	8.70B	5.40B	5.44B	3.80B
Investing Cash Flow	-2.41B	-2.33B	-1.53B	-1.36B	-1.22B	-130.00M
Financing Cash Flow	-5.98B	-4.47B	-3.03B	-7.04B	-4.59B	-1.34B

Applied Materials Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 217.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 217.74 is above the 20-day moving average (MA) of 184.21, above the 50-day MA of 178.46, and above the 200-day MA of 168.79, indicating a bullish trend. The MACD of 10.53 indicates Negative momentum. The RSI at 82.66 is Negative, neither overbought nor oversold. The STOCH value of 86.95 is Negative, 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
LRCX	82 Outperform	$180.06B	32.24	54.33%	0.67%	23.68%	43.16%
KLAC	80 Outperform	$148.97B	35.52	86.56%	0.64%	24.04%	49.69%
ADI	78 Outperform	$117.72B	62.51	5.74%	1.63%	7.08%	18.39%
AMAT	76 Outperform	$163.27B	24.44	35.64%	0.79%	6.70%	-5.95%
ASX	67 Neutral	$23.31B	22.60	11.59%	3.20%	4.86%	6.44%
INTC	63 Neutral	$167.85B	-7.55	-20.95%	0.37%	-3.72%	-2120.70%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Applied Materials Corporate Events

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.