Applied Materials (NASDAQ:AMAT) Shares Up 2.2% - Still a Buy?

Key Points

• Applied Materials shares rose 2.2% to about $539, supported by optimism that AI infrastructure and semiconductor-fabrication demand will drive growth in deposition, etch, memory, logic and advanced-packaging equipment.
• Analysts remain broadly bullish, with a consensus “Moderate Buy” rating and an average price target of $603.23. The company recently beat earnings and revenue expectations, while upcoming guidance and its August 13 earnings report are key catalysts.
• Risks include the stock’s elevated valuation—a P/E ratio above 50—recent insider selling, a downgrade to Hold by Erste Group Bank and reported short interest from investor Michael Burry.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) shares shot up 2.2% during mid-day trading on Friday . The stock traded as high as $545.94 and last traded at $539.14. Approximately 4,462,818 shares traded hands during trading, a decline of 46% from the average daily volume of 8,210,830 shares. The stock had previously closed at $527.48.

Key Stories Impacting Applied Materials

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

• Positive Sentiment: Applied Materials is positioned to benefit from expanding AI chip production, including potential semiconductor-fabrication and advanced-packaging demand tied to the proposed Tesla-SpaceX “terafab” buildout. Tesla-SpaceX Terafab Bet: 4 Chip Equipment Stocks That Could Benefit
• Positive Sentiment: Broader semiconductor sales continue to benefit from AI infrastructure spending, supporting the outlook for equipment suppliers such as AMAT. Citi analysts also identified Applied Materials as a preferred way to participate in an early-stage AI upcycle. Semiconductor Sales Continue to Grow on AI Optimism: 4 Stocks to Grab
• Positive Sentiment: Wall Street expects earnings growth, with bullish commentary pointing to demand for deposition, etch, CMP, memory, logic and advanced-packaging equipment. Consensus price targets imply additional upside if the company delivers a strong outlook. Applied Materials Reports Next Week: Wall Street Expects Earnings Growth
• Neutral Sentiment: Options markets are pricing a potentially large earnings-related move, making the August 13 report a key near-term catalyst. The company’s latest quarter exceeded EPS and revenue expectations, but investors will focus on forward guidance and whether AI demand is accelerating. Is the Options Market Underestimating Applied Materials Stock’s Earnings Move?
• Negative Sentiment: Erste Group Bank lowered its rating on AMAT to Hold, while a separate report linked recent weakness to an analyst downgrade. The more cautious view could limit gains ahead of earnings. Applied Materials Rating Lowered to Hold at Erste Group Bank
• Negative Sentiment: Investor Michael Burry’s reported short position in Applied Materials and warnings of a broad market reversal have increased scrutiny of highly valued AI-related stocks. As Burry Targets AI Chip Names, Is Applied Materials Still Undervalued?

Analyst Upgrades and Downgrades

A number of research firms have recently weighed in on AMAT. Royal Bank Of Canada increased their price objective on Applied Materials from $500.00 to $520.00 and gave the company an "outperform" rating in a research note on Friday, May 15th. Bank of America upped their price target on shares of Applied Materials from $540.00 to $720.00 and gave the company a "buy" rating in a report on Tuesday, June 23rd. Needham & Company LLC increased their price target on shares of Applied Materials from $530.00 to $740.00 and gave the company a "buy" rating in a research report on Friday, July 10th. UBS Group raised their price target on shares of Applied Materials from $570.00 to $705.00 and gave the stock a "buy" rating in a report on Wednesday, July 15th. Finally, Argus boosted their price objective on shares of Applied Materials from $420.00 to $500.00 and gave the company a "buy" rating in a research report on Tuesday, May 19th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-six have issued a Buy rating and seven have issued a Hold rating to the stock. According to data from MarketBeat, Applied Materials presently has a consensus rating of "Moderate Buy" and an average price target of $603.23.

Applied Materials Stock Up 2.2%

The company has a debt-to-equity ratio of 0.22, a current ratio of 2.51 and a quick ratio of 1.80. The stock has a market capitalization of $428.06 billion, a PE ratio of 50.62, a PEG ratio of 1.35 and a beta of 1.61. The company has a 50 day moving average price of $557.69 and a 200-day moving average price of $437.00.

Applied Materials (NASDAQ:AMAT - Get Free Report) last released its quarterly earnings results on Thursday, May 14th. The manufacturing equipment provider reported $2.86 earnings per share for the quarter, beating the consensus estimate 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 for the quarter, compared to analysts' expectations of $7.68 billion. During the same quarter in the previous year, the business posted $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. As a group, analysts forecast that Applied Materials, Inc. will post 12.17 earnings per share for the current fiscal year.

Applied Materials Announces Dividend

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 dividend of $0.53 per share. This represents a $2.12 dividend on an annualized basis and a dividend yield of 0.4%. The ex-dividend date is Thursday, August 20th. Applied Materials's payout ratio is 19.91%.

Insider Transactions at Applied Materials

In related news, insider Prabu G. Raja sold 10,000 shares of the business's stock in a transaction dated 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 of the company's stock, 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 legal filing with the SEC, which is available at this link. Also, Director Thomas J. Iannotti sold 9,250 shares of the company's stock in a transaction dated Tuesday, June 16th. The stock was sold at an average price of $599.77, for a total transaction of $5,547,872.50. Following the completion of the sale, the director owned 40,559 shares in the company, valued at approximately $24,326,071.43. This trade represents a 18.57% decrease in their position. The SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 278,088 shares of company stock worth $169,654,805. 0.30% of the stock is owned by insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Capital Research Global Investors lifted its stake in shares of Applied Materials by 119.8% in 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 in the last quarter. Norges Bank bought a new stake in shares of Applied Materials during the fourth quarter valued at approximately $2,858,543,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its position in shares of Applied Materials by 617.2% during the third quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 9,129,483 shares of the manufacturing equipment provider's stock valued at $1,869,170,000 after acquiring an additional 7,856,576 shares in the last quarter. Auto Owners Insurance Co raised its holdings in Applied Materials by 25,824.4% in the 4th quarter. Auto Owners Insurance Co now owns 3,370,167 shares of the manufacturing equipment provider's stock worth $86,610,000 after acquiring an additional 3,357,167 shares during the last quarter. Finally, Coatue Management LLC raised its holdings in Applied Materials by 78.7% in the 4th quarter. Coatue Management LLC now owns 5,984,332 shares of the manufacturing equipment provider's stock worth $1,537,913,000 after acquiring an additional 2,635,284 shares during the last quarter. Institutional investors own 80.56% of the company's stock.

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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