Applied Materials (NASDAQ:AMAT) Shares Up 3.2% - Still a Buy?

Key Points

• Applied Materials shares rose 3.2% on the session, with trading volume well above average, as investors reacted to fresh optimism around semiconductor equipment demand.
• Recent reports that Meta plans to manufacture its own AI chip boosted the entire chip-equipment group, while Applied Materials’ CEO said the AI investment cycle could last longer than expected and that demand visibility remains strong.
• Wall Street sentiment is broadly bullish: several analysts raised price targets, and Applied Materials recently beat earnings estimates and lifted guidance, though the stock is still trading at a relatively rich valuation.

Shares of Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) rose 3.2% on Thursday . The company traded as high as $629.98 and last traded at $588.66. Approximately 14,014,078 shares traded hands during trading, an increase of 68% from the average daily volume of 8,332,869 shares. The stock had previously closed at $570.50.

Key Headlines Impacting Applied Materials

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

• Positive Sentiment: Shares rose as reports that Meta plans to start manufacturing its own AI chip in September boosted expectations for wafer fabrication equipment demand, benefiting Applied Materials alongside peers like Lam Research and KLA. Applied Materials stock jumps as Meta AI chip plan lifts semiconductor names
• Positive Sentiment: Applied Materials’ CEO said the AI investment cycle may last longer than expected and highlighted “tremendous visibility” into demand, reinforcing optimism that chipmakers will keep spending on production tools. Applied Materials CEO Sees 'Tremendous Visibility' Into Demand
• Positive Sentiment: Analysts also lifted sentiment with a price-target increase, while commentary around extended chip demand through 2030 and stronger advanced packaging growth added to the bullish case for AMAT. Susquehanna Raises Price Target on Applied Materials, Inc. (AMAT)
• Neutral Sentiment: Broader AI-related stocks and semiconductor equipment names are also moving higher, which is supporting AMAT through sector momentum rather than company-specific news alone. Wall Street Can’t Get Enough of These AI Plays
• Neutral Sentiment: Recent coverage also noted volatility after a pullback in semiconductor shares, suggesting investors are still debating valuation even as the long-term demand story improves. Applied Materials (AMAT) Rebounds On AI Demand Outlook As Fair Value Debate Returns

Analysts Set New Price Targets

AMAT has been the subject of several recent research reports. JPMorgan Chase & Co. increased their price objective on shares of Applied Materials from $400.00 to $515.00 and gave the stock an "overweight" rating in a research report on Friday, May 15th. KeyCorp upped their price target on shares of Applied Materials from $550.00 to $750.00 and gave the stock an "overweight" rating in a research report on Monday, June 29th. Seaport Research Partners started coverage on Applied Materials in a report on Monday, May 4th. They issued a "buy" rating and a $500.00 price target for the company. Mizuho raised their price objective on Applied Materials from $540.00 to $650.00 and gave the company an "outperform" rating in a research report on Wednesday. Finally, Deutsche Bank Aktiengesellschaft boosted their price objective on Applied Materials from $450.00 to $550.00 and gave the stock a "buy" rating in a research note on Friday, May 15th. One research analyst has rated the stock with a Strong Buy rating, twenty-seven have issued a Buy rating and six have given a Hold rating to the stock. According to MarketBeat.com, the company has a consensus rating of "Moderate Buy" and a consensus price target of $578.84.

Applied Materials Price Performance

The company has a debt-to-equity ratio of 0.22, a quick ratio of 1.80 and a current ratio of 2.51. The stock has a market cap of $467.37 billion, a price-to-earnings ratio of 55.27, a price-to-earnings-growth ratio of 1.54 and a beta of 1.57. The business's fifty day simple moving average is $509.35 and its 200 day simple moving average is $398.54.

Applied Materials (NASDAQ:AMAT - Get Free Report) last announced its 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 return on equity of 36.97% and a net margin of 29.31%.The company had revenue of $7.91 billion during the quarter, compared to the consensus estimate of $7.68 billion. During the same period last year, the firm earned $2.39 earnings per share. The company's revenue was up 11.4% on a year-over-year basis. Applied Materials has set its Q3 2026 guidance at 3.160-3.560 EPS. Research analysts predict that Applied Materials, Inc. will post 12.11 EPS for the current fiscal year.

Applied Materials Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be paid a dividend of $0.53 per share. This represents a $2.12 dividend on an annualized basis and a yield of 0.4%. The ex-dividend date is Thursday, August 20th. Applied Materials's dividend payout ratio (DPR) is 19.91%.

Insider Activity at Applied Materials

In other Applied Materials news, insider Prabu G. Raja sold 10,000 shares of Applied Materials stock in a transaction that occurred on Thursday, June 18th. The stock was sold at an average price of $633.53, for a total transaction of $6,335,300.00. Following the sale, the insider directly owned 346,642 shares in the company, valued at $219,608,106.26. The trade was a 2.80% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, SVP Timothy M. Deane sold 8,621 shares of the company's stock in a transaction that occurred on Monday, June 15th. The shares were sold at an average price of $590.76, for a total value of $5,092,941.96. Following the completion of the transaction, the senior vice president directly owned 134,631 shares in the company, valued at approximately $79,534,609.56. The trade was a 6.02% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 278,088 shares of company stock worth $169,654,805 over the last ninety days. Company insiders own 0.30% of the company's stock.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in the stock. Evolve Private Wealth LLC raised its holdings in shares of Applied Materials by 59.0% during the first quarter. Evolve Private Wealth LLC now owns 2,875 shares of the manufacturing equipment provider's stock worth $983,000 after purchasing an additional 1,067 shares during the period. Worth Asset Management LLC acquired a new position in shares of Applied Materials in the 4th quarter valued at about $1,531,000. World Investment Advisors grew its position in shares of Applied Materials by 4.5% during the 4th quarter. World Investment Advisors now owns 82,296 shares of the manufacturing equipment provider's stock valued at $21,149,000 after buying an additional 3,508 shares during the last quarter. WealthPlan Investment Management LLC bought a new stake in shares of Applied Materials during the 4th quarter valued at about $1,082,000. Finally, Avity Investment Management Inc. raised its stake in Applied Materials by 1.1% during the third quarter. Avity Investment Management Inc. now owns 223,211 shares of the manufacturing equipment provider's stock worth $45,700,000 after acquiring an additional 2,376 shares during the period. 80.56% of the stock is currently 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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