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

Key Points

• Applied Materials shares gapped up significantly, opening at $188.00 after a previous close of $178.13, and were last traded at $190.44 with a trading volume of over 3 million shares.
• Multiple brokerages have reduced their target prices for Applied Materials to $200.00, with Wolfe Research and TD Cowen maintaining an "outperform" and "buy" rating, respectively.
• The company reported strong quarterly earnings with $2.48 EPS, exceeding expectations, and announced a quarterly dividend of $0.46, reflecting a 1.0% dividend yield.

Shares of Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) gapped up prior to trading on Thursday . The stock had previously closed at $178.13, but opened at $188.00. Applied Materials shares last traded at $190.44, with a volume of 3,277,027 shares trading hands.

Analysts Set New Price Targets

Several equities research analysts have recently commented on the company. Citigroup cut their price target on Applied Materials from $220.00 to $205.00 and set a "buy" rating for the company in a research note on Friday, August 15th. Deutsche Bank Aktiengesellschaft lowered their price objective on shares of Applied Materials from $200.00 to $170.00 and set a "hold" rating for the company in a research note on Friday, August 15th. Morgan Stanley raised shares of Applied Materials from an "equal weight" rating to an "overweight" rating and lifted their price target for the company from $172.00 to $209.00 in a research report on Monday. TD Cowen decreased their target price on Applied Materials from $220.00 to $200.00 and set a "buy" rating for the company in a research report on Friday, August 15th. Finally, JPMorgan Chase & Co. lifted their price target on shares of Applied Materials from $210.00 to $220.00 and gave the stock an "overweight" rating in a research note on Friday, August 15th. Seventeen investment analysts have rated the stock with a Buy rating, twelve have issued a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $194.35.

Applied Materials Stock Up 5.5%

The company has a debt-to-equity ratio of 0.28, a quick ratio of 1.76 and a current ratio of 2.50. The firm has a market capitalization of $159.74 billion, a P/E ratio of 23.90, a P/E/G ratio of 2.71 and a beta of 1.77. The stock has a fifty day moving average price of $176.30 and a two-hundred day moving average price of $165.67.

Applied Materials (NASDAQ:AMAT - Get Free Report) last issued its earnings results on Thursday, August 14th. The manufacturing equipment provider reported $2.48 earnings per share for the quarter, topping analysts' consensus estimates of $2.36 by $0.12. Applied Materials had a net margin of 23.88% and a return on equity of 40.96%. The company had revenue of $7.30 billion for the quarter, compared to analysts' expectations of $7.21 billion. During the same period in the prior year, the company earned $2.12 earnings per share. The firm's revenue was up 7.7% compared to the same quarter last year. Applied Materials has set its Q4 2025 guidance at 1.910-2.310 EPS. Research analysts forecast that Applied Materials, Inc. will post 9.38 EPS for the current year.

Applied Materials Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, December 11th. Investors of record on Thursday, November 20th will be issued a $0.46 dividend. The ex-dividend date of this dividend is Thursday, November 20th. This represents a $1.84 annualized dividend and a yield of 0.9%. Applied Materials's dividend payout ratio is presently 21.93%.

Insider Activity at Applied Materials

In related news, CAO Adam Sanders sold 562 shares of the business's stock in a transaction that occurred on Tuesday, June 24th. The stock was sold at an average price of $178.60, for a total transaction of $100,373.20. Following the sale, the chief accounting officer owned 5,300 shares of the company's stock, valued at $946,580. The trade was a 9.59% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Company insiders own 0.24% of the company's stock.

Institutional Trading of Applied Materials

Several institutional investors and hedge funds have recently added to or reduced their stakes in AMAT. Brighton Jones LLC boosted its holdings in shares of Applied Materials by 28.0% in the fourth quarter. Brighton Jones LLC now owns 12,674 shares of the manufacturing equipment provider's stock worth $2,061,000 after buying an additional 2,771 shares during the period. Value Partners Investments Inc. lifted its position in shares of Applied Materials by 8.7% in the 4th quarter. Value Partners Investments Inc. now owns 9,896 shares of the manufacturing equipment provider's stock valued at $1,608,000 after acquiring an additional 793 shares in the last quarter. Mackenzie Financial Corp boosted its stake in Applied Materials by 15.9% in the 4th quarter. Mackenzie Financial Corp now owns 198,308 shares of the manufacturing equipment provider's stock worth $32,251,000 after purchasing an additional 27,168 shares during the period. Perennial Advisors LLC acquired a new position in Applied Materials in the 4th quarter worth approximately $2,439,000. Finally, Ameriflex Group Inc. purchased a new position in Applied Materials during the 4th quarter worth approximately $108,000. 80.56% of the stock is owned by institutional investors and hedge funds.

Applied Materials Company Profile

Applied Materials, Inc engages in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries. The company operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits.