Applied Materials (NASDAQ:AMAT) Stock Price Down 1.6% - Should You Sell?

Key Points

• Applied Materials shares slipped 1.6% in Tuesday trading, even though volume was above average; the stock fell from a prior close of $413.57 to about $406.91.
• Despite the pullback, analysts remain broadly bullish: several firms raised price targets to the $510–$525 range, and the consensus rating is still “Moderate Buy.”
• The company’s fundamentals look solid, with better-than-expected quarterly earnings and revenue, a higher quarterly dividend, and strong margins that have been supported by AI-related demand and strong semiconductor equipment spending.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) fell 1.6% during mid-day trading on Tuesday . The company traded as low as $397.37 and last traded at $406.91. 8,375,542 shares changed hands during mid-day trading, an increase of 13% from the average session volume of 7,398,173 shares. The stock had previously closed at $413.57.

Key Applied Materials News

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

• Positive Sentiment: Argus raised its price target on Applied Materials (AMAT) to $500 from $420 and maintained a buy rating, implying meaningful upside and signaling confidence in the company’s AI infrastructure exposure. Argus raises Applied Materials price target
• Positive Sentiment: Recent articles point to rising earnings estimates for Applied Materials, which typically supports the stock because analyst revisions often reflect improving fundamentals and stronger near-term profit expectations. Surging earnings estimates signal upside
• Positive Sentiment: Coverage highlighting Applied Materials’ international revenue trends and record gross margin suggests the company is benefiting from strong demand, premium product mix, and AI-related spending, all of which can improve investor sentiment. Applied Materials margin reaches historic high
• Neutral Sentiment: Several articles note that AMAT is receiving heavy search interest from investors, reflecting heightened attention rather than a direct catalyst. Investors heavily search Applied Materials
• Negative Sentiment: Morgan Stanley reportedly cut Applied Materials, creating a headwind for sentiment even as other firms remain constructive on the name. Morgan Stanley downgrades Applied Materials

Analysts Set New Price Targets

A number of brokerages have issued reports on AMAT. Sanford C. Bernstein reissued an "outperform" rating and issued a $525.00 target price on shares of Applied Materials in a research report on Friday. TD Cowen boosted their target price on Applied Materials from $450.00 to $525.00 and gave the company a "buy" rating in a research report on Friday. Royal Bank Of Canada boosted their price target on shares of Applied Materials from $500.00 to $520.00 and gave the stock an "outperform" rating in a research note on Friday. Citigroup boosted their price target 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. Finally, Jefferies Financial Group boosted their price target on shares of Applied Materials from $415.00 to $510.00 and gave the stock a "buy" rating in a research note on Friday. Twenty-seven research 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 currently has a consensus rating of "Moderate Buy" and an average target price of $465.14.

Applied Materials Price Performance

The stock's 50 day moving average is $380.43 and its two-hundred day moving average is $321.37. 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 $322.93 billion, a PE ratio of 38.21, a price-to-earnings-growth ratio of 1.92 and a beta of 1.66.

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 net margin of 29.31% and a return on equity of 36.97%. The firm had revenue of $7.91 billion for the quarter, compared to analyst estimates of $7.68 billion. During the same period in the prior year, the firm earned $2.39 earnings per share. The business's quarterly revenue 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, sell-side analysts forecast that Applied Materials, Inc. will post 11.28 earnings per share for the current fiscal year.

Applied Materials Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Investors of record on Thursday, May 21st will be issued a $0.53 dividend. This represents a $2.12 annualized dividend and a yield of 0.5%. This is a boost from Applied Materials's previous quarterly dividend of $0.46. The ex-dividend date of this dividend is Thursday, May 21st. Applied Materials's dividend payout ratio is currently 17.28%.

Insider Buying and Selling at Applied Materials

In other Applied Materials news, Director Judy Bruner sold 3,969 shares of the company's stock in a transaction on Monday, February 23rd. The shares were sold at an average price of $377.02, for a total value of $1,496,392.38. Following the completion of the transaction, the director owned 28,589 shares in the company, valued at $10,778,624.78. This represents a 12.19% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, CAO Adam Sanders sold 534 shares of the company's stock in a transaction on Tuesday, February 24th. The shares were sold at an average price of $379.16, for a total transaction of $202,471.44. Following the completion of the transaction, the chief accounting officer owned 4,625 shares of the company's stock, valued at $1,753,615. This represents a 10.35% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 7,003 shares of company stock worth $2,678,139 in the last three months. 0.30% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Applied Materials

Several large investors have recently bought and sold shares of the stock. Grandfield & Dodd LLC lifted its position in Applied Materials by 6.9% in the third quarter. Grandfield & Dodd LLC now owns 269,511 shares of the manufacturing equipment provider's stock valued at $55,180,000 after purchasing an additional 17,397 shares during the period. First Trust Advisors LP lifted its position in Applied Materials by 4.9% in the third quarter. First Trust Advisors LP now owns 3,101,772 shares of the manufacturing equipment provider's stock valued at $635,057,000 after purchasing an additional 145,050 shares during the period. Canada Post Corp Registered Pension Plan lifted its position in Applied Materials by 82.2% in the third quarter. Canada Post Corp Registered Pension Plan now owns 26,893 shares of the manufacturing equipment provider's stock valued at $5,512,000 after purchasing an additional 12,132 shares during the period. Elo Mutual Pension Insurance Co lifted its position in Applied Materials by 21.8% in the third quarter. Elo Mutual Pension Insurance Co now owns 96,712 shares of the manufacturing equipment provider's stock valued at $19,801,000 after purchasing an additional 17,288 shares during the period. Finally, Worth Asset Management LLC acquired a new stake in Applied Materials in the fourth quarter valued at about $1,531,000. Institutional investors and hedge funds own 80.56% of the company's stock.

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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