Applied Materials (NASDAQ:AMAT) Shares Up 1.4% - Time to Buy?

Key Points

• Applied Materials shares rose 1.4% in Tuesday trading, with volume running well above average as the stock touched an intraday high of $525.98 before settling near $499.21.
• The company announced a higher quarterly dividend of $0.53 per share, up from $0.46, signaling confidence in cash generation and continuing its shareholder-return focus.
• Analyst sentiment remains constructive: several firms raised price targets, and Applied Materials beat quarterly earnings and revenue expectations while benefiting from renewed optimism around AI-related semiconductor equipment demand.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report)'s stock price shot up 1.4% during trading on Tuesday . The company traded as high as $525.98 and last traded at $499.21. 11,053,616 shares changed hands during mid-day trading, an increase of 48% from the average session volume of 7,458,796 shares. The stock had previously closed at $492.17.

Applied Materials News Summary

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

• Positive Sentiment: Applied Materials announced a quarterly cash dividend of $0.53 per share, reinforcing its shareholder-return strategy and signaling management confidence in cash generation. Applied Materials Announces Cash Dividend
• Positive Sentiment: Recent coverage continues to point to AI-related semiconductor equipment demand and upbeat analyst sentiment as key drivers for AMAT, with the stock benefiting from the broader rebound in chip equipment names. Applied Materials, Inc. (AMAT) Eyes Growing Southeast Asia Workforce by 25%
• Positive Sentiment: The semiconductor sector recovered after a sharp selloff, lifting Applied Materials along with other equipment makers as investors rotated back into the group. Applied Materials and KLA Corporation stocks trade up, what you need to know
• Neutral Sentiment: Reports that semiconductor short sellers are piling into the trade and that the sector may be entering a corrective phase could create near-term volatility for AMAT, but these headlines are broader industry read-throughs rather than company-specific developments. Semiconductor shorts pile on as winning trade reverses
• Negative Sentiment: Some commentary notes that the semiconductor index has hit an upside target and may be due for a pullback, which could weigh on AMAT if investors expect a broader chip-equipment correction. Semiconductor Index Outlook: Upside Target Reached, Correction Underway
• Negative Sentiment: AMAT has also been mentioned in valuation-focused pieces after a very strong one-year run, suggesting some investors may be questioning how much upside is left at current levels. Should You Buy, Sell or Hold AMAT Stock After a 167% Rise in a Year?

Analyst Ratings Changes

A number of research firms have commented on AMAT. Barclays boosted their price target on shares of Applied Materials from $450.00 to $500.00 and gave the company an "overweight" rating in a research report on Friday, May 15th. Erste Group Bank upgraded shares of Applied Materials from a "hold" rating to a "buy" rating in a research report on Monday, April 27th. Jefferies Financial Group boosted their price target on shares of Applied Materials from $415.00 to $510.00 and gave the company a "buy" rating in a research report on Friday, May 15th. Weiss Ratings reaffirmed a "buy (b-)" rating on shares of Applied Materials in a research note on Friday, March 27th. Finally, Citigroup boosted their target price on shares of Applied Materials from $420.00 to $520.00 and gave the stock a "buy" rating in a research note on Tuesday, May 12th. Twenty-seven analysts have rated the stock with a Buy rating and eight have assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $470.13.

Applied Materials Price Performance

The stock has a market capitalization of $396.35 billion, a P/E ratio of 46.87, a PEG ratio of 1.27 and a beta of 1.67. The company has a current ratio of 2.51, a quick ratio of 1.80 and a debt-to-equity ratio of 0.22. The company has a fifty day simple moving average of $412.01 and a two-hundred day simple moving average of $344.99.

Applied Materials (NASDAQ:AMAT - Get Free Report) last issued its earnings results on Thursday, May 14th. The manufacturing equipment provider reported $2.86 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.68 by $0.18. The company had revenue of $7.91 billion for the quarter, compared to analyst estimates of $7.68 billion. Applied Materials had a net margin of 29.31% and a return on equity of 36.97%. The company's revenue for the quarter was up 11.4% on a year-over-year basis. During the same quarter last year, the firm earned $2.39 EPS. Applied Materials has set its Q3 2026 guidance at 3.160-3.560 EPS. Sell-side analysts expect that Applied Materials, Inc. will post 12.02 EPS for the current fiscal year.

Applied Materials Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, June 11th. Investors of record on Thursday, May 21st will be paid a dividend of $0.53 per share. This represents a $2.12 dividend on an annualized basis and a dividend yield of 0.4%. This is a positive change 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 19.91%.

Insider Buying and Selling at Applied Materials

In other news, CAO Adam Sanders sold 268 shares of the company's stock in a transaction that occurred on Friday, May 22nd. The shares were sold at an average price of $434.22, for a total value of $116,370.96. Following the completion of the transaction, the chief accounting officer owned 4,280 shares in the company, valued at $1,858,461.60. This represents a 5.89% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO Brice Hill sold 2,500 shares of the stock in a transaction on Wednesday, June 3rd. The stock was sold at an average price of $498.86, for a total transaction of $1,247,150.00. Following the transaction, the chief financial officer owned 136,113 shares of the company's stock, valued at $67,901,331.18. The trade was a 1.80% decrease in their position. The SEC filing for this sale provides additional information. In the last three months, insiders sold 53,896 shares of company stock valued at $27,135,121. 0.30% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Applied Materials

A number of hedge funds have recently bought and sold shares of AMAT. Vanguard Group Inc. increased its holdings in 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 valued at $19,731,523,000 after buying an additional 330,197 shares during the period. Capital Research Global Investors lifted its position in shares of Applied Materials by 119.8% in the 4th quarter. Capital Research Global Investors now owns 32,707,049 shares of the manufacturing equipment provider's stock worth $8,405,458,000 after purchasing an additional 17,829,377 shares during the period. Ameriprise Financial Inc. increased its stake in shares of Applied Materials by 40.1% in the 3rd quarter. Ameriprise Financial Inc. now owns 12,520,114 shares of the manufacturing equipment provider's stock valued at $2,563,376,000 after acquiring an additional 3,583,751 shares in the last quarter. Morgan Stanley increased its stake in Applied Materials by 3.4% during the 4th 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 in the last quarter. Finally, Norges Bank bought a new stake in Applied Materials during the 4th quarter valued at $2,858,543,000. 80.56% of the stock is owned by institutional investors.

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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