Applied Materials (NASDAQ:AMAT) Shares Down 6.5% - Should You Sell?

Key Points

• Applied Materials shares fell 6.5% on Tuesday, with heavy trading volume above average, as the stock moved down to around $554 after closing near $593 the prior session.
• Despite the selloff, Wall Street sentiment remains upbeat: several firms recently raised price targets, including Morgan Stanley to $647 and Goldman Sachs to $645, and the overall consensus rating is still “Moderate Buy.”
• Fundamentals and outlook remain solid, with the company beating last quarter’s earnings and revenue estimates and issuing Q3 guidance above the prior-year level, though the stock is also under pressure from a broader semiconductor and memory-sector selloff.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report)'s share price dropped 6.5% on Tuesday . The company traded as low as $527.63 and last traded at $554.50. 12,224,569 shares were traded during trading, an increase of 47% from the average session volume of 8,303,085 shares. The stock had previously closed at $592.79.

More Applied Materials News

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

• Positive Sentiment: Morgan Stanley raised its price target on Applied Materials to $647 from $502, while keeping an equal-weight rating, signaling higher expectations for the stock’s value. Applied Materials NASDAQ: AMAT Given New $647.00 Price Target at Morgan Stanley
• Positive Sentiment: Goldman Sachs also lifted its price target on AMAT to $645, reinforcing bullish Street sentiment around chip equipment demand. 2 Chip Stocks Driving Today’s Rally With Lofty Bull Notes
• Positive Sentiment: Zacks highlighted AMAT as a strong momentum name and said AI-driven demand, broad product exposure, and earnings momentum still support further upside. Best Momentum Stock to Buy for July 7th
• Positive Sentiment: Analysts and market commentary continue to frame Applied Materials as a beneficiary of AI infrastructure spending, including new AI-related product development such as its SENZ platform for smart glasses. Applied Materials (AMAT) Unveils AI-Powered SENZ Platform to Accelerate Smart Glasses Development
• Neutral Sentiment: Applied Materials has also been a high-momentum stock lately, with coverage noting it has risen sharply from its 52-week low; that strength can attract buyers, but it also leaves the shares susceptible to periodic cooling off. AMAT Stock Rises 284% From Its 52-Week Low: Should You Buy Now?
• Negative Sentiment: AMAT is falling alongside other chip stocks after a broader semiconductor selloff tied to Samsung-related industry concerns, which is weighing on the entire group. Intel and Applied Materials Dive 10%...
• Negative Sentiment: Investors are also rotating out of memory-related names as the sector slips into a bear market, adding to the weak sentiment around chip suppliers. Micron, Samsung, SK Hynix just dragged memory stocks into a bear market

Wall Street Analysts Forecast Growth

Several research firms have weighed in on AMAT. Erste Group Bank upgraded Applied Materials from a "hold" rating to a "buy" rating in a report on Monday, April 27th. Deutsche Bank Aktiengesellschaft increased their target price on Applied Materials from $450.00 to $550.00 and gave the company a "buy" rating in a research report on Friday, May 15th. Weiss Ratings reissued a "buy (b-)" rating on shares of Applied Materials in a report on Wednesday, June 24th. Jefferies Financial Group upped their price target on shares of Applied Materials from $510.00 to $770.00 and gave the company a "buy" rating in a research note on Friday, June 26th. Finally, Wall Street Zen raised shares of Applied Materials from a "hold" rating to a "buy" rating in a research note on Saturday, May 23rd. One equities research analyst has rated the stock with a Strong Buy rating, twenty-seven have assigned a Buy rating and six have assigned a Hold rating to the company. Based on data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average price target of $569.65.

Applied Materials Stock Down 6.5%

The firm has a market cap of $440.25 billion, a P/E ratio of 52.07, a P/E/G ratio of 1.68 and a beta of 1.57. 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 price of $499.51 and a 200-day moving average price of $391.80.

Applied Materials (NASDAQ:AMAT - Get Free Report) last released its quarterly earnings data on Thursday, May 14th. The manufacturing equipment provider reported $2.86 earnings per share for the quarter, beating 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 the consensus estimate of $7.68 billion. During the same period in the previous year, the company posted $2.39 earnings per share. The firm's quarterly 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. On average, equities analysts forecast that Applied Materials, Inc. will post 12.11 EPS for the current fiscal year.

Applied Materials Announces Dividend

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 paid a dividend of $0.53 per share. The ex-dividend date is Thursday, August 20th. This represents a $2.12 dividend on an annualized basis and a dividend yield of 0.4%. Applied Materials's dividend payout ratio (DPR) is currently 19.91%.

Insider Activity at Applied Materials

In other news, Director Thomas J. Iannotti sold 9,250 shares of the business'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 completion of the transaction, the director directly owned 40,559 shares of the company's stock, valued at approximately $24,326,071.43. The trade was a 18.57% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, SVP Timothy M. Deane sold 8,621 shares of the firm's stock in a transaction dated Monday, June 15th. The shares were sold at an average price of $590.76, for a total value of $5,092,941.96. Following the sale, the senior vice president directly owned 134,631 shares in the company, valued at approximately $79,534,609.56. The trade was a 6.02% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 278,088 shares of company stock valued at $169,654,805 over the last quarter. 0.30% of the stock is owned by insiders.

Hedge Funds Weigh In On Applied Materials

Several institutional investors and hedge funds have recently bought and sold shares of AMAT. Cornerstone Financial Management LLC acquired a new stake in Applied Materials in the fourth quarter worth about $25,000. Wilkerson Advisory Group LLC acquired a new stake in Applied Materials in the 4th quarter worth approximately $26,000. Financial Freedom LLC purchased a new stake in Applied Materials during the 1st quarter worth approximately $28,000. Highline Wealth Partners LLC increased its stake in Applied Materials by 48.7% during the 4th quarter. Highline Wealth Partners LLC now owns 116 shares of the manufacturing equipment provider's stock valued at $30,000 after purchasing an additional 38 shares in the last quarter. Finally, Joseph Group Capital Management purchased a new position in shares of Applied Materials in the fourth quarter worth $31,000. 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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