Applied Materials (NASDAQ:AMAT) Shares Gap Up - Should You Buy?

Key Points

• Applied Materials shares gapped up sharply, opening at $627.31 after closing at $570.50 and last trading around $625.37 on heavy volume.
• Analyst sentiment remains bullish, with several firms raising price targets; Susquehanna lifted its target to $900 and the stock now carries a Moderate Buy consensus rating with an average target of $573.19.
• The company recently beat earnings expectations, reporting $2.86 EPS on $7.91 billion in revenue, and it also announced a quarterly dividend of $0.53 per share payable September 10.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report)'s stock price gapped up prior to trading on Thursday . The stock had previously closed at $570.50, but opened at $627.31. Applied Materials shares last traded at $625.3650, with a volume of 2,069,892 shares changing hands.

Wall Street Analyst Weigh In

A number of research analysts have weighed in on AMAT shares. Susquehanna boosted their target price on shares of Applied Materials from $575.00 to $900.00 and gave the stock a "positive" rating in a research report on Tuesday, June 30th. Citigroup boosted their price objective on Applied Materials from $550.00 to $710.00 and gave the stock a "buy" rating in a research report on Wednesday, June 17th. TD Cowen restated a "buy" rating on shares of Applied Materials in a research note on Thursday. Mizuho raised their target price on Applied Materials from $540.00 to $650.00 and gave the company an "outperform" rating in a report on Wednesday. Finally, Seaport Research Partners began coverage on Applied Materials in a research report on Monday, May 4th. They issued a "buy" rating and a $500.00 price target on the stock. One investment 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. According to data from MarketBeat.com, Applied Materials has an average rating of "Moderate Buy" and a consensus target price of $573.19.

Applied Materials Price Performance

The stock's 50-day moving average price is $509.35 and its 200 day moving average price is $398.54. The firm has a market cap of $485.38 billion, a price-to-earnings ratio of 57.35, a price-to-earnings-growth ratio of 1.54 and a beta of 1.57. 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 released its earnings results on Thursday, May 14th. The manufacturing equipment provider reported $2.86 earnings per share for the quarter, topping analysts' consensus estimates of $2.68 by $0.18. Applied Materials had a return on equity of 36.97% and a net margin of 29.31%.The business had revenue of $7.91 billion for the quarter, compared to the consensus estimate of $7.68 billion. During the same period last year, the business earned $2.39 earnings per share. The firm's revenue for the quarter was up 11.4% compared to the same quarter last year. Applied Materials has set its Q3 2026 guidance at 3.160-3.560 EPS. Equities research analysts predict that Applied Materials, Inc. will post 12.11 earnings per share for the current year.

Applied Materials Announces Dividend

The company also recently disclosed 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 annualized dividend and a dividend yield of 0.3%. The ex-dividend date of this dividend is Thursday, August 20th. Applied Materials's dividend payout ratio (DPR) is presently 19.91%.

Insider Buying and Selling at Applied Materials

In other Applied Materials news, insider Prabu G. Raja sold 10,000 shares of Applied Materials stock in a transaction on Thursday, June 18th. The shares were sold at an average price of $633.53, for a total transaction of $6,335,300.00. Following the sale, the insider 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 transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, SVP Timothy M. Deane sold 8,621 shares of the business's stock in a transaction on Monday, June 15th. The shares were sold at an average price of $590.76, for a total transaction of $5,092,941.96. Following the completion of the sale, the senior vice president directly owned 134,631 shares in the company, valued at $79,534,609.56. This trade represents a 6.02% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 278,088 shares of company stock valued at $169,654,805 in the last quarter. 0.30% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Applied Materials

Hedge funds and other institutional investors have recently made changes to their positions in the business. Cornerstone Financial Management LLC bought a new position in shares of Applied Materials during the 4th quarter worth approximately $25,000. Wilkerson Advisory Group LLC acquired a new stake in Applied Materials in the 4th quarter valued at $26,000. Financial Freedom LLC bought a new stake in Applied Materials in the first quarter valued at $28,000. Highline Wealth Partners LLC raised 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 in the last quarter. Finally, Joseph Group Capital Management bought a new position in shares of Applied Materials during the fourth quarter valued at $31,000. 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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