Applied Materials (NASDAQ:AMAT) Shares Gap Up - Here's Why

Key Points

• Applied Materials shares gapped up after upbeat analyst action and AI-related demand optimism, opening well above the prior close and trading higher on heavy volume.
• Wall Street sentiment is turning more bullish, with Barclays reiterating Overweight and multiple firms raising price targets; one new Street-high target is near $650.
• Recent fundamentals are strong, including record quarterly revenue, elevated gross margins, and a raised Q3 2026 outlook, reinforcing the view that AMAT is a beneficiary of AI infrastructure spending.

Shares of Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) gapped up before the market opened on Thursday . The stock had previously closed at $497.01, but opened at $522.49. Applied Materials shares last traded at $535.3450, with a volume of 1,342,507 shares.

Key Headlines Impacting Applied Materials

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

• Positive Sentiment: Barclays reiterated an Overweight view and raised its price target on Applied Materials (AMAT), reinforcing bullish expectations for continued upside as AI-related chip spending supports wafer fab equipment demand. Barclays reiterates Overweight ratings on Applied Materials and KLA amid strong investment in new chip supply.
• Positive Sentiment: New analyst targets, including a Street-high view near $650, have added to the bullish momentum and suggest Wall Street sees further valuation upside for the stock. Applied Materials Stock Scores a New Street-High Price Target from a Top Wall Street Analyst.
• Positive Sentiment: Applied Materials (AMAT) reported strong revenue and margin trends recently, including record quarterly revenue and elevated gross margins, which is helping investors view the company as a key AI infrastructure winner. How Record Margins, AI Demand Visibility and Singapore Expansion At Applied Materials Has Changed Its Investment Story.
• Positive Sentiment: The company’s new $500 million Singapore manufacturing and R&D expansion more than doubles local cleanroom capacity, signaling confidence in long-term AI chip demand and stronger production capability. Applied Materials Expands Singapore Manufacturing to Support AI Chip Demand.

Wall Street Analyst Weigh In

AMAT has been the topic of a number of research reports. Wall Street Zen raised Applied Materials from a "hold" rating to a "buy" rating in a research note on Saturday, May 23rd. Deutsche Bank Aktiengesellschaft upped their price target on Applied Materials from $450.00 to $550.00 and gave the stock a "buy" rating in a research note on Friday, May 15th. Stifel Nicolaus set a $530.00 price target on Applied Materials in a research note on Friday, May 15th. Jefferies Financial Group upped their price target on Applied Materials from $415.00 to $510.00 and gave the stock a "buy" rating in a research note on Friday, May 15th. Finally, Royal Bank Of Canada upped their price target on Applied Materials from $500.00 to $520.00 and gave the stock an "outperform" rating in a research note on Friday, May 15th. Twenty-seven research analysts have rated the stock with a Buy rating and eight have given a Hold rating to the stock. According to MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $483.03.

Applied Materials Trading Up 6.6%

The stock has a market capitalization of $420.61 billion, a PE ratio of 49.80, a P/E/G ratio of 1.40 and a beta of 1.67. The firm has a 50 day moving average price of $418.73 and a 200 day moving average price of $348.79. 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 EPS for the quarter, topping the consensus estimate of $2.68 by $0.18. The firm had revenue of $7.91 billion during the quarter, compared to the consensus estimate of $7.68 billion. Applied Materials had a return on equity of 36.97% and a net margin of 29.31%.The company's quarterly revenue was up 11.4% compared to the same quarter last year. During the same period in the prior year, the business posted $2.39 earnings per share. Applied Materials has set its Q3 2026 guidance at 3.160-3.560 EPS. Equities analysts expect that Applied Materials, Inc. will post 12.02 EPS for the current fiscal year.

Applied Materials Dividend Announcement

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

Insiders Place Their Bets

In other news, Director Judy Bruner sold 1,128 shares of the company's stock in a transaction that occurred on Tuesday, May 26th. The stock was sold at an average price of $450.00, for a total value of $507,600.00. Following the completion of the transaction, the director directly owned 26,544 shares of the company's stock, valued at $11,944,800. This represents a 4.08% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, CFO Brice Hill sold 2,500 shares of the company's stock in a transaction that occurred on Wednesday, June 3rd. The shares were sold at an average price of $498.86, for a total value of $1,247,150.00. Following the completion of the transaction, the chief financial officer directly owned 136,113 shares of the company's stock, valued at approximately $67,901,331.18. This represents a 1.80% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last three months, insiders sold 53,896 shares of company stock valued at $27,135,121. Insiders own 0.30% of the company's stock.

Hedge Funds Weigh In On Applied Materials

Several institutional investors have recently modified their holdings of the business. Vanguard Group Inc. grew its holdings in shares of Applied Materials by 0.4% in the fourth quarter. Vanguard Group Inc. now owns 76,779,340 shares of the manufacturing equipment provider's stock valued at $19,731,523,000 after acquiring an additional 330,197 shares in the last quarter. Capital Research Global Investors grew its holdings 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 during the period. Ameriprise Financial Inc. grew its holdings 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 valued at $2,563,376,000 after purchasing an additional 3,583,751 shares during the period. Morgan Stanley grew its holdings 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 valued at $2,947,891,000 after purchasing an additional 373,012 shares during the period. Finally, Norges Bank bought a new position in Applied Materials during the fourth quarter valued at $2,858,543,000. 80.56% of the stock is 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.

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