Applied Materials (NASDAQ:AMAT) Shares Down 8.3% - What's Next?

Key Points

• Shares fell 8.3% to about $338.55 on Thursday with volume up ~17%, despite Applied beating quarterly EPS ($2.38 vs. $2.21), reporting record DRAM equipment revenue and announcing a 15% dividend increase to $0.53 per quarter.
• Analysts remain broadly positive—MarketBeat shows a consensus of "Moderate Buy" with an average target of $363.46 and several firms raising targets (Morgan Stanley $432)—but sector rotation and mixed notes/valuation concerns have created near‑term selling pressure.
• Management set Q2 guidance at EPS $2.44–2.84; the company has a trailing PE of 34.65, strong margins/ROE, high institutional ownership (~80.6%), and modest insider selling reported in the last quarter.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report)'s share price was down 8.3% during trading on Thursday . The stock traded as low as $337.53 and last traded at $338.55. Approximately 9,200,149 shares traded hands during trading, an increase of 17% from the average daily volume of 7,854,959 shares. The stock had previously closed at $369.34.

Key Applied Materials News

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

• Positive Sentiment: Q1/FY results and corporate actions — Applied reported record DRAM equipment revenue and unveiled new tools for advanced nodes, plus a 15% quarterly dividend increase, which underline strong execution and shareholder returns. Read More.
• Positive Sentiment: Structural tailwinds — Analysts note HBM (high-bandwidth memory) and advanced packaging demand tied to AI chips as meaningful revenue growth drivers for AMAT’s tool portfolio. These end-markets support multi-year demand visibility. Read More.
• Positive Sentiment: Policy and supply-chain support — U.S. and allied semiconductor supply-chain initiatives plus logistics partnerships (e.g., expanded Asia distribution) increase the odds of greater capital spending and easier deployment for equipment suppliers like AMAT. Read More.
• Neutral Sentiment: Peer/valuation comparison — Analyst coverage shows both ASML and AMAT favored by many analysts, but ASML’s EUV monopoly commands a premium valuation; that differentiation frames relative upside expectations. Read More.
• Neutral Sentiment: Short-interest reporting appears unreliable in recent feeds (odd zero/share entries); no clear large short-squeeze pressure evident from the published data. Read More.
• Negative Sentiment: Sector-level weakness / valuation pressure — Tech ETFs and large-cap tech names have lagged despite earnings beats; broad rotation out of tech and concerns about stretched valuations are weighing on AMAT alongside peers. This sector drag helps explain downward price pressure even with strong company results. Read More.
• Negative Sentiment: Mixed analyst signals — A recent note listing AMAT as “hold” from one shop (Erste via Zacks feed) muddies the street’s message (some bullish, some cautious), which can amplify short-term selling after a rally. Read More.

Analyst Upgrades and Downgrades

A number of brokerages have weighed in on AMAT. Summit Insights raised Applied Materials from a "hold" rating to a "buy" rating in a research report on Friday, February 13th. Morgan Stanley lifted their price target on shares of Applied Materials from $420.00 to $432.00 and gave the stock an "overweight" rating in a research note on Wednesday, February 25th. Sanford C. Bernstein reissued an "outperform" rating and set a $425.00 price objective on shares of Applied Materials in a report on Friday, February 13th. Weiss Ratings upgraded shares of Applied Materials from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Monday, December 29th. Finally, Royal Bank Of Canada set a $430.00 target price on shares of Applied Materials in a report on Friday, February 13th. One research analyst has rated the stock with a Strong Buy rating, twenty-six have given a Buy rating and seven have issued a Hold rating to the stock. According to MarketBeat, the company has a consensus rating of "Moderate Buy" and an average target price of $363.46.

Applied Materials Price Performance

The firm has a market cap of $268.68 billion, a PE ratio of 34.65, a P/E/G ratio of 1.67 and a beta of 1.65. The firm's fifty day simple moving average is $344.45 and its two-hundred day simple moving average is $273.54. The company has a quick ratio of 1.94, a current ratio of 2.71 and a debt-to-equity ratio of 0.30.

Applied Materials (NASDAQ:AMAT - Get Free Report) last announced its quarterly earnings data on Thursday, February 12th. The manufacturing equipment provider reported $2.38 EPS for the quarter, beating the consensus estimate of $2.21 by $0.17. The firm had revenue of $7.01 billion for the quarter, compared to the consensus estimate of $6.88 billion. Applied Materials had a net margin of 27.78% and a return on equity of 37.52%. The company's revenue was down 2.1% on a year-over-year basis. During the same period last year, the firm earned $2.38 EPS. Applied Materials has set its Q2 2026 guidance at 2.440-2.840 EPS. As a group, research analysts expect that Applied Materials, Inc. will post 9.38 EPS for the current year.

Applied Materials Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Stockholders of record on Thursday, May 21st will be issued a $0.53 dividend. This represents a $2.12 annualized dividend and a dividend yield of 0.6%. This is a boost from Applied Materials's previous quarterly dividend of $0.46. The ex-dividend date of this dividend is Thursday, May 21st. Applied Materials's payout ratio is presently 18.83%.

Insider Buying and Selling

In other news, Director Judy Bruner sold 3,969 shares of the firm's stock in a transaction dated Monday, February 23rd. The stock was sold at an average price of $377.02, for a total transaction of $1,496,392.38. Following the completion of the transaction, the director owned 28,589 shares in the company, valued at $10,778,624.78. This trade represents a 12.19% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at the SEC website. Also, CAO Adam Sanders sold 534 shares of Applied Materials stock in a transaction that occurred on Tuesday, February 24th. The stock was sold at an average price of $379.16, for a total value of $202,471.44. Following the completion of the sale, the chief accounting officer directly owned 4,625 shares in the company, valued at approximately $1,753,615. The trade was a 10.35% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last quarter, insiders sold 12,003 shares of company stock worth $4,484,189. 0.30% of the stock is owned by insiders.

Institutional Investors Weigh In On Applied Materials

A number of hedge funds have recently bought and sold shares of the business. Cornerstone Financial Management LLC purchased a new stake in shares of Applied Materials during the 4th quarter valued at about $25,000. Marquette Asset Management LLC grew its position in Applied Materials by 150.0% in the third quarter. Marquette Asset Management LLC now owns 125 shares of the manufacturing equipment provider's stock worth $26,000 after acquiring an additional 75 shares in the last quarter. Redmont Wealth Advisors LLC purchased a new position in Applied Materials in the third quarter worth about $26,000. Wilkerson Advisory Group LLC bought a new stake in Applied Materials during the fourth quarter worth approximately $26,000. Finally, Highline Wealth Partners LLC increased its stake in Applied Materials by 48.7% during the fourth quarter. Highline Wealth Partners LLC now owns 116 shares of the manufacturing equipment provider's stock worth $30,000 after acquiring an additional 38 shares during the last quarter. Hedge funds and other institutional investors own 80.56% of the company's stock.

About Applied Materials

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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