Applied Materials (NASDAQ:AMAT) Stock Price Down 4.1% - Here's What Happened

Key Points

• Shares fell 4.1% intraday despite bullish catalysts — including a Seaport Research Buy with a $500 target, multiple analyst upgrades and Applied’s acquisition of the NEXX business to expand into AI chip packaging.
• Applied recently beat quarterly estimates (EPS $2.38 vs. $2.21) and set Q2 guidance of $2.44–$2.84, while raising its quarterly dividend to $0.53, supporting the company’s near-term fundamentals.
• Risks include a rich valuation (P/S ~9.4x) that could amplify downside if growth slips, plus recent insider selling and likely short-term profit-taking ahead of earnings.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) dropped 4.1% on Thursday . The company traded as low as $406.01 and last traded at $410.8330. Approximately 7,135,219 shares traded hands during mid-day trading, a decline of 1% from the average daily volume of 7,175,017 shares. The stock had previously closed at $428.62.

Key Headlines Impacting Applied Materials

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

• Positive Sentiment: Seaport Research initiated coverage with a Buy and $500 price target, calling AMAT best positioned among wafer fab equipment suppliers — a bullish analyst endorsement supporting longer-term demand assumptions. Seaport Research Initiates Coverage of Applied Materials (AMAT) with Buy
• Positive Sentiment: Applied agreed to acquire the NEXX business from ASMPT, adding panel-level advanced packaging tools aimed at AI chip packaging — a strategic M&A move that broadens AMAT’s addressable market in AI infrastructure. Applied Materials Expands AI Packaging With NEXX Deal As Stock Surges
• Positive Sentiment: Pre-earnings analyst support has increased (including a Morgan Stanley upgrade), which bolsters sentiment heading into the report. Morgan Stanley upgrades Applied Materials stock price target pre-earnings
• Neutral Sentiment: AMAT has a strong history of beating estimates and Wall Street expects earnings growth next week — this raises the chance of a positive surprise but also increases pre-report volatility. Applied Materials (AMAT) Reports Next Week: Wall Street Expects Earnings Growth
• Neutral Sentiment: Management visibility events: Applied will participate in investor conferences this week — useful for guidance clarity but unlikely to move the stock dramatically on their own. Applied Materials to Participate in Upcoming Investor Conferences
• Neutral Sentiment: Technicals: AMAT recently cleared its 20-day moving average, signaling short-term momentum, but technical strength can invite profit-taking after a large run. Applied Materials (AMAT) Just Overtook the 20-Day Moving Average
• Negative Sentiment: Valuation concerns: commentary highlights AMAT’s premium P/S multiple (~9.4x) after a strong YTD rally, which raises downside risk if growth expectations slip. Should You Buy, Sell or Hold AMAT Stock at a P/S Valuation of 9.39X?
• Negative Sentiment: Short-term profit-taking and pre-earnings jitters after a big run higher are likely drivers of today’s pullback despite the positive newsflow. 7 stocks expecting a post-earnings jolt — including Applied Materials and Cisco Systems

Analyst Upgrades and Downgrades

Several research firms recently issued reports on AMAT. Mizuho boosted their price objective on Applied Materials from $370.00 to $410.00 and gave the company an "outperform" rating in a report on Friday, February 13th. Citigroup boosted their price objective on Applied Materials from $400.00 to $420.00 and gave the company a "buy" rating in a report on Friday, February 13th. TD Cowen boosted their price objective on Applied Materials from $315.00 to $450.00 and gave the company a "buy" rating in a report on Friday, February 13th. Stifel Nicolaus upped their price objective on Applied Materials from $340.00 to $450.00 and gave the stock a "buy" rating in a research report on Friday, February 13th. Finally, Barclays upped their price objective on Applied Materials from $360.00 to $450.00 and gave the stock an "overweight" rating in a research report on Friday, February 13th. Twenty-seven equities research analysts have rated the stock with a Buy rating and seven have given a Hold rating to the stock. According to data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average target price of $370.86.

Applied Materials Stock Down 4.1%

The firm has a market cap of $326.04 billion, a PE ratio of 42.05, a price-to-earnings-growth ratio of 1.83 and a beta of 1.66. The business has a 50-day moving average price of $370.45 and a two-hundred day moving average price of $309.88. The company has a quick ratio of 1.94, a current ratio of 2.71 and a debt-to-equity ratio of 0.30.

Applied Materials (NASDAQ:AMAT - Get Free Report) last posted its earnings results on Thursday, February 12th. The manufacturing equipment provider reported $2.38 EPS for the quarter, beating the consensus estimate of $2.21 by $0.17. The firm had revenue of $7.01 billion for the quarter, compared to analyst estimates of $6.88 billion. Applied Materials had a return on equity of 37.52% and a net margin of 27.78%.Applied Materials's revenue for the quarter was down 2.1% compared to the same quarter last year. During the same quarter in the prior year, the company posted $2.38 earnings per share. Applied Materials has set its Q2 2026 guidance at 2.440-2.840 EPS. On average, equities research analysts expect that Applied Materials, Inc. will post 11.14 EPS for the current year.

Applied Materials Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Investors of record on Thursday, May 21st will be given a $0.53 dividend. 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. This represents a $2.12 dividend on an annualized basis and a dividend yield of 0.5%. Applied Materials's payout ratio is 18.83%.

Insider Activity at Applied Materials

In related news, CAO Adam Sanders sold 534 shares of the company's stock in a transaction dated Tuesday, February 24th. The stock was sold at an average price of $379.16, for a total value of $202,471.44. Following the completion of the sale, the chief accounting officer directly owned 4,625 shares of the company's stock, valued at $1,753,615. This represents a 10.35% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through 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 stock was sold at an average price of $391.71, for a total value of $979,275.00. Following the transaction, the director directly owned 26,089 shares in the company, valued at approximately $10,219,322.19. This trade represents a 8.74% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 12,003 shares of company stock valued at $4,484,189 over the last ninety days. Insiders own 0.30% of the company's stock.

Institutional Trading of Applied Materials

A number of large investors have recently bought and sold shares of AMAT. Vanguard Group Inc. raised its stake in 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 acquiring an additional 330,197 shares during the last quarter. Capital Research Global Investors increased its holdings 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 valued at $8,405,458,000 after purchasing an additional 17,829,377 shares during the period. Ameriprise Financial Inc. raised its stake in shares of Applied Materials by 40.1% during the third quarter. Ameriprise Financial Inc. now owns 12,520,114 shares of the manufacturing equipment provider's stock worth $2,563,376,000 after purchasing an additional 3,583,751 shares during the last quarter. Morgan Stanley lifted its holdings in shares of Applied Materials by 3.4% during the fourth quarter. Morgan Stanley now owns 11,470,835 shares of the manufacturing equipment provider's stock worth $2,947,891,000 after purchasing an additional 373,012 shares during the period. Finally, Norges Bank purchased a new position in Applied Materials in the 4th quarter valued at $2,858,543,000. Institutional investors and hedge funds 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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