Applied Materials (NASDAQ:AMAT) Stock Price Down 2.9% - Here's What Happened

Key Points

• Shares fell 2.9% to $404.86 on Monday despite Applied Materials beating Q1 estimates (EPS $2.38 vs. $2.21; revenue $7.01B vs. $6.88B) and setting Q2 guidance of $2.44–$2.84 per share.
• Several analysts lifted price targets to as high as $450, and the consensus is a Moderate Buy (27 Buy, 6 Hold) with an average target of $368.29.
• The company increased its quarterly dividend to $0.53 (annualized $2.12, 0.5% yield); insiders sold about 12,003 shares (~$4.48M) last quarter while institutional ownership rose to 80.56%.

Shares of Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) traded down 2.9% during mid-day trading on Monday . The company traded as low as $398.00 and last traded at $404.86. 5,411,626 shares changed hands during trading, a decline of 25% from the average session volume of 7,228,667 shares. The stock had previously closed at $417.04.

Wall Street Analyst Weigh In

A number of equities research analysts have recently issued reports on the stock. KeyCorp boosted their price objective on shares of Applied Materials from $380.00 to $450.00 and gave the company an "overweight" rating in a research report on Friday, February 13th. Barclays boosted their price objective on shares of Applied Materials from $360.00 to $450.00 and gave the company an "overweight" rating in a research report on Friday, February 13th. Needham & Company LLC boosted their price objective on shares of Applied Materials from $390.00 to $440.00 and gave the company a "buy" rating in a research report on Friday, February 13th. TD Cowen boosted their price objective on shares of Applied Materials from $315.00 to $450.00 and gave the company a "buy" rating in a research report on Friday, February 13th. Finally, Zacks Research raised shares of Applied Materials from a "hold" rating to a "strong-buy" rating in a research report on Tuesday, February 17th. One analyst has rated the stock with a Strong Buy rating, twenty-seven have assigned a Buy rating and six have assigned a Hold rating to the stock. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $368.29.

Applied Materials Price Performance

The company has a market cap of $321.30 billion, a P/E ratio of 41.44, a P/E/G ratio of 1.86 and a beta of 1.64. The company has a debt-to-equity ratio of 0.30, a quick ratio of 1.94 and a current ratio of 2.71. The firm's fifty day moving average is $366.44 and its two-hundred day moving average is $302.28.

Applied Materials (NASDAQ:AMAT - Get Free Report) last issued its earnings results on Thursday, February 12th. The manufacturing equipment provider reported $2.38 earnings per share for the quarter, topping the consensus estimate of $2.21 by $0.17. The company had revenue of $7.01 billion during the quarter, compared to the consensus estimate of $6.88 billion. Applied Materials had a net margin of 27.78% and a return on equity of 37.52%. Applied Materials's quarterly revenue was down 2.1% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $2.38 EPS. Applied Materials has set its Q2 2026 guidance at 2.440-2.840 EPS. As a group, analysts anticipate that Applied Materials, Inc. will post 11.1 earnings per share for the current fiscal year.

Applied Materials Increases Dividend

The company 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. The ex-dividend date of this dividend is Thursday, May 21st. This represents a $2.12 annualized dividend and a yield of 0.5%. This is an increase from Applied Materials's previous quarterly dividend of $0.46. Applied Materials's payout ratio is currently 18.83%.

Insider Activity

In other news, CAO Adam Sanders sold 534 shares of Applied Materials stock in a transaction that occurred 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 sale, the chief accounting officer owned 4,625 shares in the company, valued at $1,753,615. This trade represents a 10.35% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Also, Director Judy Bruner sold 2,500 shares of Applied Materials stock in a transaction that occurred on Wednesday, February 25th. The shares were sold at an average price of $391.71, for a total transaction of $979,275.00. Following the sale, the director owned 26,089 shares in the company, valued at approximately $10,219,322.19. The trade was a 8.74% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 12,003 shares of company stock worth $4,484,189 over the last quarter. Insiders own 0.30% of the company's stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently made changes to their positions in the stock. Vanguard Group Inc. boosted its holdings in shares of Applied Materials by 0.4% during 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 purchasing an additional 330,197 shares during the last quarter. Capital Research Global Investors boosted its holdings in shares of Applied Materials by 119.8% during the 4th quarter. Capital Research Global Investors now owns 32,707,049 shares of the manufacturing equipment provider's stock valued at $8,405,458,000 after purchasing an additional 17,829,377 shares during the last quarter. Ameriprise Financial Inc. boosted its holdings in shares of Applied Materials by 40.1% during 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 purchasing an additional 3,583,751 shares during the last quarter. Morgan Stanley boosted its holdings in shares of 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 during the last quarter. Finally, Norges Bank bought a new position in shares of Applied Materials during the 4th quarter valued at about $2,858,543,000. 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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