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

Key Points

• Applied Materials shares gapped down at the open, falling from a prior close of $723 to an opening price of $668.41, and were last trading around $682.96.
• Despite the pullback, the company has been backed by bullish analyst sentiment, with several firms raising targets and 27 analysts rating the stock a Buy versus eight Holds. The consensus target price is $553.56, according to MarketBeat.
• Applied Materials recently beat quarterly expectations, reporting EPS of $2.86 versus $2.68 expected and revenue of $7.91 billion, while also issuing Q3 guidance above prior estimates. The company also announced a quarterly dividend of $0.53 per share.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) shares gapped down prior to trading on Wednesday . The stock had previously closed at $723.00, but opened at $668.41. Applied Materials shares last traded at $682.9620, with a volume of 2,509,317 shares changing hands.

Trending Headlines about Applied Materials

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

• Positive Sentiment: KeyBanc and Cantor Fitzgerald both turned more constructive on Applied Materials, with KeyBanc lifting its price target and analysts highlighting upside ahead of the company’s upcoming earnings report. Why Applied Materials Shares Are Surging Monday
• Positive Sentiment: Erste Group Bank raised its FY2026 and FY2027 EPS forecasts for AMAT, reinforcing expectations that earnings momentum remains strong. Applied Materials analyst estimate update
• Positive Sentiment: Applied Materials has been one of the biggest beneficiaries of the AI capex boom, with chipmakers continuing to spend on semiconductor equipment as AI infrastructure demand expands. Applied Materials Hits New All-Time Highs
• Positive Sentiment: Broader strength in semiconductor stocks and record highs across peers like Lam Research and ASML have also supported sentiment toward AMAT. Lam Research Stock, Chip Gear Peers Hit Record Highs

Wall Street Analyst Weigh In

AMAT has been the subject of several recent analyst reports. Royal Bank Of Canada upped their price objective on Applied Materials from $500.00 to $520.00 and gave the stock an "outperform" rating in a research report on Friday, May 15th. Stifel Nicolaus set a $530.00 target price on Applied Materials in a research report on Friday, May 15th. Sanford C. Bernstein reissued an "outperform" rating and set a $525.00 target price on shares of Applied Materials in a research note on Friday, May 15th. Seaport Research Partners assumed coverage on shares of Applied Materials in a research note on Monday, May 4th. They issued a "buy" rating and a $500.00 price target on the stock. Finally, HC Wainwright set a $850.00 price target on shares of Applied Materials in a report on Monday. Twenty-seven equities research analysts have rated the stock with a Buy rating and eight have assigned a Hold rating to the stock. According to MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $553.56.

Applied Materials Stock Down 8.6%

The stock has a 50 day moving average price of $486.16 and a 200 day moving average price of $384.29. The stock has a market capitalization of $524.66 billion, a price-to-earnings ratio of 62.39, a price-to-earnings-growth ratio of 1.93 and a beta of 1.67. The company has a quick ratio of 1.80, a current ratio of 2.51 and a debt-to-equity ratio of 0.22.

Applied Materials (NASDAQ:AMAT - Get Free Report) last issued its quarterly earnings data on Thursday, May 14th. The manufacturing equipment provider reported $2.86 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $2.68 by $0.18. Applied Materials had a net margin of 29.31% and a return on equity of 36.97%. The business had revenue of $7.91 billion during the quarter, compared to analyst estimates of $7.68 billion. During the same quarter last year, the business earned $2.39 EPS. 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. As a group, analysts forecast that Applied Materials, Inc. will post 12.11 EPS for the current year.

Applied Materials Announces Dividend

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 issued a dividend of $0.53 per share. This represents a $2.12 dividend on an annualized basis and a dividend yield of 0.3%. The ex-dividend date is Thursday, August 20th. Applied Materials's payout ratio is 19.91%.

Insiders Place Their Bets

In related news, CEO Gary E. Dickerson sold 71,727 shares of the firm's stock in a transaction on Tuesday, June 16th. The stock was sold at an average price of $593.75, for a total transaction of $42,587,906.25. Following the completion of 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. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. Also, insider Prabu G. Raja sold 10,000 shares of Applied Materials stock in a transaction dated Thursday, June 18th. The stock was sold at an average price of $633.53, for a total value of $6,335,300.00. Following the transaction, the insider directly owned 346,642 shares in the company, valued at $219,608,106.26. The trade was a 2.80% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 199,767 shares of company stock valued at $114,104,709 over the last ninety days. 0.30% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Applied Materials

A number of hedge funds and other institutional investors have recently made changes to their positions in AMAT. Vanguard Group Inc. lifted its position in shares of Applied Materials by 0.4% in the 4th quarter. Vanguard Group Inc. now owns 76,779,340 shares of the manufacturing equipment provider's stock worth $19,731,523,000 after purchasing an additional 330,197 shares during the period. Capital Research Global Investors increased its position in shares of 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 worth $8,405,458,000 after buying an additional 17,829,377 shares during the period. Ameriprise Financial Inc. raised its stake in Applied Materials by 40.1% during 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 buying an additional 3,583,751 shares during the last quarter. Morgan Stanley raised its stake in Applied Materials by 3.4% during the fourth quarter. Morgan Stanley now owns 11,470,835 shares of the manufacturing equipment provider's stock worth $2,947,891,000 after buying an additional 373,012 shares during the last quarter. Finally, Norges Bank acquired a new position in Applied Materials in the fourth quarter valued at $2,858,543,000. 80.56% of the stock is owned by institutional investors and hedge funds.

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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