Applied Materials (NASDAQ:AMAT) Shares Down 6.2% - Should You Sell?

Key Points

• Applied Materials shares fell 6.2% on Friday, trading as low as $622.00 after closing at $668.00, with volume surging well above average. The move came despite recent positive momentum in the stock.
• The company has been highlighting new chipmaking systems for DRAM and advanced packaging, which analysts say could benefit from AI-driven demand and strengthen Applied Materials’ position in semiconductor equipment. Wall Street sentiment remains constructive, with multiple firms maintaining buy or outperform ratings.
• Applied Materials recently posted better-than-expected earnings and revenue, raised guidance, and declared a quarterly dividend, but insider selling has been notable. CEO Gary E. Dickerson and SVP Omkaram Nalamasu both sold shares in June, even as institutional ownership remains high.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report)'s stock price dropped 6.2% during trading on Friday . The stock traded as low as $622.00 and last traded at $626.84. Approximately 27,465,281 shares changed hands during mid-day trading, an increase of 242% from the average daily volume of 8,033,927 shares. The stock had previously closed at $668.00.

Key Applied Materials News

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

• Positive Sentiment: Applied Materials unveiled new chipmaking systems aimed at DRAM and advanced packaging, potentially boosting demand from AI infrastructure customers and reinforcing its leadership in semiconductor equipment. Applied Materials Introduces New Systems to Accelerate DRAM and Advanced Packaging for AI Chips
• Positive Sentiment: Wall Street sentiment remains constructive, with analysts citing Applied Materials’ strong market position and continued confidence in its growth outlook. AMAT stock gets thumbs up from Wall Street – analysts remain confident about Applied Materials’ strong market position
• Positive Sentiment: Analysts highlighted Applied Materials’ event as especially relevant to DRAM and advanced packaging, suggesting the company is well positioned to benefit from AI-driven chip demand. Applied Materials' event focuses on DRAM, and advanced packaging: analysts
• Positive Sentiment: Applied Materials is being framed as a key AI-chip infrastructure winner, with new tools designed to improve memory speed, yield, and packaging efficiency. Applied Materials NASDAQ: AMAT Turns Heads With AI Chip Systems

Wall Street Analysts Forecast Growth

Several research firms recently weighed in on AMAT. Susquehanna lifted their target price on Applied Materials from $435.00 to $500.00 and gave the company a "positive" rating in a research report on Thursday, April 9th. Wall Street Zen raised Applied Materials from a "hold" rating to a "buy" rating in a research note on Saturday, May 23rd. Sanford C. Bernstein reiterated an "outperform" rating and set a $525.00 price objective on shares of Applied Materials in a research note on Friday, May 15th. Royal Bank Of Canada increased their target price on shares of Applied Materials from $500.00 to $520.00 and gave the stock an "outperform" rating in a report on Friday, May 15th. Finally, Erste Group Bank upgraded shares of Applied Materials from a "hold" rating to a "buy" rating in a research note on Monday, April 27th. Twenty-seven analysts have rated the stock with a Buy rating and eight have assigned a Hold rating to the stock. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus price target of $518.19.

Applied Materials Stock Down 6.2%

The firm has a market capitalization of $497.69 billion, a PE ratio of 58.86, a P/E/G ratio of 1.64 and a beta of 1.67. 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 company has a 50-day moving average price of $468.89 and a 200 day moving average price of $375.60.

Applied Materials (NASDAQ:AMAT - Get Free Report) last released its earnings results on Thursday, May 14th. The manufacturing equipment provider reported $2.86 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.68 by $0.18. Applied Materials had a return on equity of 36.97% and a net margin of 29.31%.The firm had revenue of $7.91 billion during the quarter, compared to analysts' expectations of $7.68 billion. During the same quarter last year, the business posted $2.39 earnings per share. The firm's revenue was up 11.4% on a year-over-year basis. Applied Materials has set its Q3 2026 guidance at 3.160-3.560 EPS. Analysts forecast that Applied Materials, Inc. will post 12.1 earnings per share for the current year.

Applied Materials Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be given 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 0.3%. Applied Materials's dividend payout ratio (DPR) is presently 19.91%.

Insider Transactions at Applied Materials

In other Applied Materials news, SVP Omkaram Nalamasu sold 24,263 shares of Applied Materials stock in a transaction on Tuesday, June 16th. The shares were sold at an average price of $593.43, for a total value of $14,398,392.09. Following the sale, the senior vice president directly owned 146,916 shares in the company, valued at approximately $87,184,361.88. The trade was a 14.17% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, CEO Gary E. Dickerson sold 71,727 shares of the stock in a transaction dated Tuesday, June 16th. The shares were sold at an average price of $593.75, for a total transaction of $42,587,906.25. Following the transaction, the chief executive officer directly 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. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders have sold 199,767 shares of company stock valued at $114,104,709. 0.30% of the stock is owned by corporate insiders.

Institutional Trading of Applied Materials

Several hedge funds have recently modified their holdings of the company. Capital Research Global Investors raised its stake in Applied Materials by 119.8% during the fourth quarter. Capital Research Global Investors now owns 32,707,049 shares of the manufacturing equipment provider's stock valued at $8,405,458,000 after purchasing an additional 17,829,377 shares in the last quarter. Norges Bank purchased a new stake in shares of Applied Materials during the 4th quarter valued at about $2,858,543,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its holdings in shares of Applied Materials by 617.2% in the 3rd quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 9,129,483 shares of the manufacturing equipment provider's stock valued at $1,869,170,000 after acquiring an additional 7,856,576 shares during the last quarter. Ameriprise Financial Inc. grew its position in Applied Materials by 40.1% in the third quarter. Ameriprise Financial Inc. now owns 12,520,114 shares of the manufacturing equipment provider's stock worth $2,563,376,000 after acquiring an additional 3,583,751 shares in the last quarter. Finally, Auto Owners Insurance Co increased its stake in Applied Materials by 25,824.4% during the fourth quarter. Auto Owners Insurance Co now owns 3,370,167 shares of the manufacturing equipment provider's stock worth $86,610,000 after acquiring an additional 3,357,167 shares during the last quarter. 80.56% of the stock is owned by hedge funds and other 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.

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