Applied Materials (NASDAQ:AMAT) Shares Down 5.1% - Time to Sell?

Key Points

• Applied Materials fell 5.1% to about $507 despite beating fiscal Q3 expectations, with revenue up 24.8% year over year to $9.12 billion and adjusted EPS of $3.50.
• Management issued above-consensus fiscal Q4 guidance and cited strong AI, advanced packaging and memory demand, while analysts largely maintained bullish ratings with a $624.35 consensus price target.
• The selloff reflects elevated expectations after the stock more than doubled, alongside concerns about valuation, margin and systems-growth expectations, intensifying competition and possible GAAP or “whisper” earnings shortfalls.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) fell 5.1% during mid-day trading on Friday . The stock traded as low as $497.10 and last traded at $507.18. 12,529,027 shares changed hands during mid-day trading, an increase of 52% from the average session volume of 8,247,112 shares. The stock had previously closed at $534.54.

Key Applied Materials News

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

• Positive Sentiment: Record results and strong AI demand: Fiscal Q3 revenue rose 24.8% year over year to $9.12 billion, exceeding the $8.99 billion consensus estimate, while adjusted EPS of $3.50 topped estimates near $3.40. Growth was supported by AI infrastructure, advanced packaging and memory demand. Applied Materials Announces Third Quarter 2026 Results
• Positive Sentiment: Above-consensus Q4 guidance: Management forecast fiscal Q4 revenue of approximately $9.8 billion to $10.8 billion and EPS of $3.82 to $4.22, ahead of analyst expectations. The company also reported a record 50.4% non-GAAP gross margin and said customer planning provides unusually strong visibility into 2027 and beyond. Applied Materials forecasts quarterly revenue above estimates
• Positive Sentiment: Analyst support remains widespread: JPMorgan raised its price target to $660 with an Overweight rating, while Needham maintained Buy with a $740 target. TD Cowen also reaffirmed Buy with a $700 target, suggesting analysts see the pullback as an opportunity if AI-related capital spending continues. Applied Materials Stock Tanks Despite Q3 Beat
• Neutral Sentiment: Options market anticipates a rebound: Barchart derivatives data indicates traders expect AMAT to recover over the coming weeks, although options positioning also reflects elevated near-term volatility. Applied Materials Options Data
• Negative Sentiment: Expectations were too elevated: Investors appeared to view the earnings beat as insufficient after AMAT’s shares more than doubled during the year. Reports cited concerns about the pace of systems growth, margin commentary and guidance relative to the lofty valuation.
• Negative Sentiment: Competition and execution concerns: Analysts noted intensifying competition in wafer-fabrication equipment and questioned whether Applied Materials can grow faster than peers. Some coverage also referenced a GAAP or “whisper” EPS shortfall and investment-related losses, adding to the disappointing reaction despite strong adjusted results. Applied Materials slips as investors seek faster growth

Wall Street Analyst Weigh In

A number of research analysts have commented on AMAT shares. Royal Bank Of Canada boosted their target price on Applied Materials from $520.00 to $600.00 and gave the company an "outperform" rating in a research note on Friday. Mizuho lifted their target price on shares of Applied Materials from $540.00 to $650.00 and gave the company an "outperform" rating in a research note on Wednesday, July 8th. UBS Group set a $675.00 target price on shares of Applied Materials in a research report on Friday. Susquehanna raised their price target on shares of Applied Materials from $575.00 to $900.00 and gave the company a "positive" rating in a report on Tuesday, June 30th. Finally, HSBC reissued a "buy" rating and set a $683.00 target price on shares of Applied Materials in a research report on Monday, July 27th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-seven have issued a Buy rating and seven have issued a Hold rating to the company's stock. According to data from MarketBeat, Applied Materials currently has an average rating of "Moderate Buy" and a consensus target price of $624.35.

Applied Materials Stock Performance

The company has a market cap of $402.68 billion, a price-to-earnings ratio of 47.62, a P/E/G ratio of 1.38 and a beta of 1.61. The company has a debt-to-equity ratio of 0.22, a current ratio of 2.51 and a quick ratio of 1.80. The firm has a fifty day simple moving average of $563.06 and a 200 day simple moving average of $444.45.

Applied Materials (NASDAQ:AMAT - Get Free Report) last issued its quarterly earnings data on Thursday, August 13th. The manufacturing equipment provider reported $3.50 earnings per share for the quarter, topping analysts' consensus estimates of $3.40 by $0.10. The business had revenue of $9.12 billion during the quarter, compared to analysts' expectations of $8.99 billion. Applied Materials had a net margin of 29.31% and a return on equity of 36.97%. Applied Materials's revenue for the quarter was up 24.8% on a year-over-year basis. During the same period in the previous year, the company earned $2.48 earnings per share. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. On average, sell-side analysts expect that Applied Materials, Inc. will post 12.22 earnings per share for the current fiscal year.

Applied Materials Dividend Announcement

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

Insider Buying and Selling at Applied Materials

In other Applied Materials news, CEO Gary E. Dickerson sold 71,727 shares of the firm's stock in a transaction that occurred on Tuesday, June 16th. The stock was sold at an average price of $593.75, for a total value of $42,587,906.25. Following the sale, the chief executive officer owned 1,695,164 shares of the company's stock, valued at $1,006,503,625. This trade represents a 4.06% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through this link. Also, insider Prabu G. Raja sold 50,000 shares of the stock in a transaction on Thursday, June 4th. The shares were sold at an average price of $505.28, for a total transaction of $25,264,000.00. Following the completion of the sale, the insider directly owned 356,642 shares of the company's stock, valued at approximately $180,204,069.76. This trade represents a 12.30% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 278,088 shares of company stock worth $169,654,805 in the last ninety days. 0.30% of the stock is owned by insiders.

Institutional Trading of Applied Materials

A number of large investors have recently bought and sold shares of the stock. JFS Wealth Advisors LLC grew its holdings in shares of Applied Materials by 4.3% during the second quarter. JFS Wealth Advisors LLC now owns 409 shares of the manufacturing equipment provider's stock worth $296,000 after purchasing an additional 17 shares during the last quarter. Innovative Asset Advisors Group LLC raised its holdings in shares of Applied Materials by 2.1% in the second quarter. Innovative Asset Advisors Group LLC now owns 961 shares of the manufacturing equipment provider's stock valued at $695,000 after buying an additional 20 shares during the last quarter. Stonebridge Financial Group LLC lifted its position in Applied Materials by 2.1% during the 2nd quarter. Stonebridge Financial Group LLC now owns 1,003 shares of the manufacturing equipment provider's stock worth $725,000 after buying an additional 21 shares in the last quarter. N.E.W. Advisory Services LLC lifted its position in Applied Materials by 5.9% during the 2nd quarter. N.E.W. Advisory Services LLC now owns 377 shares of the manufacturing equipment provider's stock worth $273,000 after buying an additional 21 shares in the last quarter. Finally, IMG Wealth Management Inc. grew its holdings in Applied Materials by 13.0% during the 2nd quarter. IMG Wealth Management Inc. now owns 183 shares of the manufacturing equipment provider's stock worth $132,000 after acquiring an additional 21 shares during the last quarter. 80.56% of the stock is currently owned by institutional investors.

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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