Applied Materials (NASDAQ:AMAT) Shares Down 1.3% Following Analyst Downgrade

Key Points

• Applied Materials shares fell 1.3% after Erste Group Bank downgraded the stock from “buy” to “hold,” closing at $527.48 on below-average volume.
• Despite the downgrade, analyst sentiment remains broadly positive: the stock has a “Moderate Buy” consensus rating and a $603.23 average price target, with several firms recently raising their targets.
• Insider selling and valuation are notable risks. Insiders sold 278,088 shares worth approximately $169.7 million over the past three months, while the stock trades at roughly 49.5 times earnings ahead of its next earnings report.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) dropped 1.3% during trading on Thursday after Erste Group Bank downgraded the stock from a buy rating to a hold rating. The stock traded as low as $511.05 and last traded at $527.48. Approximately 4,104,530 shares changed hands during trading, a decline of 50% from the average session volume of 8,238,845 shares. The stock had previously closed at $534.24.

Other equities analysts have also recently issued research reports about the stock. Seaport Research Partners assumed coverage on shares of Applied Materials in a research note on Monday, May 4th. They set a "buy" rating and a $500.00 price objective for the company. HSBC restated a "buy" rating and issued a $683.00 target price on shares of Applied Materials in a research report on Monday, July 27th. Truist Financial set a $575.00 target price on Applied Materials in a research note on Thursday, May 28th. Stifel Nicolaus upped their price objective on shares of Applied Materials from $530.00 to $650.00 and gave the company a "buy" rating in a research note on Friday, July 10th. Finally, UBS Group lifted their target price on shares of Applied Materials from $570.00 to $705.00 and gave the company a "buy" rating in a research note on Wednesday, July 15th. One research analyst has rated the stock with a Strong Buy rating, twenty-six have assigned a Buy rating and seven have issued a Hold rating to the company's stock. According to MarketBeat, the company has a consensus rating of "Moderate Buy" and a consensus target price of $603.23.

Insider Activity

In other news, Director Thomas J. Iannotti sold 9,250 shares of the firm's stock in a transaction on Tuesday, June 16th. The stock was sold at an average price of $599.77, for a total value of $5,547,872.50. Following the transaction, the director directly owned 40,559 shares in the company, valued at $24,326,071.43. This trade represents a 18.57% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at this link. Also, SVP Omkaram Nalamasu sold 24,263 shares of the company's stock in a transaction dated Tuesday, June 16th. The shares were sold at an average price of $593.43, for a total transaction of $14,398,392.09. Following the sale, the senior vice president directly owned 146,916 shares of the company's stock, valued at $87,184,361.88. The trade was a 14.17% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders sold 278,088 shares of company stock worth $169,654,805. Insiders own 0.30% of the company's stock.

Trending Headlines about Applied Materials

Here are the key news stories impacting Applied Materials this week:

• Positive Sentiment: AI infrastructure demand supports the long-term outlook. Analysts at Citi reportedly named Applied Materials a top semiconductor pick, arguing that an early-stage AI upcycle could benefit chip-equipment suppliers. Applied Materials’ deposition, etch, inspection and packaging tools are critical to advanced memory, logic and AI-chip production. Citi Analysts See Golden Opportunity in Semiconductor Selloff
• Positive Sentiment: Wall Street is expecting earnings growth ahead of the Aug. 13 report. Forecasts call for a year-over-year improvement, and analysts see potential for a beat based on earnings estimates and recent business momentum. The company previously exceeded expectations with quarterly EPS of $2.86 and revenue of $7.91 billion. Applied Materials Reports Next Week
• Positive Sentiment: Analysts continue to identify substantial upside. The average price target cited in recent coverage is approximately $629, while a more bullish Susquehanna forecast implies considerably greater gains. Applied Materials Fell 11% Last Month
• Neutral Sentiment: The Aug. 13 earnings release is the key near-term catalyst. Expectations are high because of AI-driven demand for memory, logic and advanced packaging, but the stock’s reaction will depend on guidance, order trends and whether results justify the optimism. Applied Materials Earnings on August 13
• Negative Sentiment: Valuation and event risk are limiting enthusiasm. With a price-to-earnings ratio near 50 and a sharp rebound from its recent low, investors may be taking profits ahead of a potentially volatile earnings reaction. What Determines Applied Materials’ Resilience on August 13 Earnings
• Negative Sentiment: Bearish sentiment increased after a downgrade and reported short position. Erste Group Bank moved its rating from “buy” to “hold,” while reports that investor Michael Burry is short AMAT add pressure to the shares and highlight concerns about an AI-related market correction. Applied Materials Faces Fresh Scrutiny After Michael Burry Short Bet

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of the company. Evolve Private Wealth LLC grew its position in Applied Materials by 59.0% in the 1st quarter. Evolve Private Wealth LLC now owns 2,875 shares of the manufacturing equipment provider's stock valued at $983,000 after buying an additional 1,067 shares during the last quarter. WealthPlan Investment Management LLC acquired a new position in Applied Materials during the fourth quarter worth about $1,082,000. Ameritas Advisory Services LLC raised its holdings in Applied Materials by 183.7% during the fourth quarter. Ameritas Advisory Services LLC now owns 3,073 shares of the manufacturing equipment provider's stock worth $790,000 after purchasing an additional 1,990 shares during the last quarter. Assetmark Inc. raised its stake in shares of Applied Materials by 9.3% during the 4th quarter. Assetmark Inc. now owns 376,513 shares of the manufacturing equipment provider's stock worth $96,760,000 after buying an additional 32,136 shares during the last quarter. Finally, CloudAlpha Capital Management Limited Hong Kong lifted its holdings in shares of Applied Materials by 204.8% in the fourth quarter. CloudAlpha Capital Management Limited Hong Kong now owns 140,773 shares of the manufacturing equipment provider's stock valued at $36,177,000 after purchasing an additional 94,587 shares in the last quarter. 80.56% of the stock is currently owned by institutional investors.

Applied Materials Trading Down 1.3%

The company has a current ratio of 2.51, a quick ratio of 1.80 and a debt-to-equity ratio of 0.22. The business has a 50 day moving average of $556.14 and a 200-day moving average of $435.59. The stock has a market cap of $418.80 billion, a PE ratio of 49.53, a price-to-earnings-growth ratio of 1.39 and a beta of 1.61.

Applied Materials (NASDAQ:AMAT - Get Free Report) last posted its quarterly earnings data on Thursday, May 14th. The manufacturing equipment provider reported $2.86 EPS for the quarter, topping analysts' consensus estimates of $2.68 by $0.18. The firm had revenue of $7.91 billion during the quarter, compared to analysts' expectations of $7.68 billion. Applied Materials had a return on equity of 36.97% and a net margin of 29.31%.The firm's quarterly revenue was up 11.4% compared to the same quarter last year. During the same quarter last year, the business posted $2.39 EPS. Applied Materials has set its Q3 2026 guidance at 3.160-3.560 EPS. On average, analysts anticipate that Applied Materials, Inc. will post 12.14 EPS for the current year.

Applied Materials Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be issued a dividend of $0.53 per share. The ex-dividend date is Thursday, August 20th. This represents a $2.12 annualized dividend and a dividend yield of 0.4%. Applied Materials's dividend payout ratio (DPR) is 19.91%.

Applied Materials Company Profile

Applied Materials, Inc is a U.S.-based supplier of equipment, services and software used to manufacture semiconductor chips, flat panel displays and other advanced materials. Headquartered in Santa Clara, California, the company designs and sells capital equipment and related technologies that enable production of integrated circuits, display panels and materials used across the electronics supply chain.

Applied Materials' offerings include process equipment and factory software that support critical steps in device fabrication, such as deposition, etch, implantation, inspection and metrology, as well as systems for packaging and advanced heterogeneous integration.

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