Applied Materials (NASDAQ:AMAT) Stock Price Down 7.8% - Time to Sell?

Key Points

• Applied Materials shares fell 7.8% to $476.46 amid broader concerns about the sustainability of AI infrastructure spending, China competition and potential slowing in semiconductor capital expenditures.
• The company’s fundamentals and outlook remain strong: its latest quarterly earnings and revenue exceeded estimates, AI-related demand continues to support wafer-fabrication spending, and analysts maintain a “Moderate Buy” consensus with an average price target of $599.19.
• Valuation and insider activity are key risks. The stock trades at a P/E ratio of 44.74 after a major rally, while insiders sold approximately $169.7 million of shares over the past 90 days.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) dropped 7.8% during trading on Tuesday . The company traded as low as $467.01 and last traded at $476.46. 9,812,773 shares changed hands during mid-day trading, an increase of 19% from the average session volume of 8,264,086 shares. The stock had previously closed at $516.89.

Applied Materials News Roundup

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

• Positive Sentiment: Applied Materials continues to benefit from AI-driven wafer-fabrication spending. A Columbia Threadneedle technology-fund letter cited the company’s exposure to semiconductor capital spending and AI-related equipment demand as contributors to its investment performance. Applied Materials Rose on AI-Driven Wafer Fabrication Spending
• Positive Sentiment: Analyst expectations remain favorable ahead of earnings: Applied Materials is among semiconductor stocks with a positive Earnings ESP, supported by AI, cloud-computing and storage demand. Its latest reported quarter also exceeded consensus estimates for earnings and revenue, while management provided third-quarter fiscal 2026 EPS guidance of $3.16 to $3.56. 3 Semiconductor Stocks Likely to Outpace Q2 Earnings Estimates
• Positive Sentiment: Several Wall Street analysts have continued issuing upgrades as memory-chip demand improves, providing a counterpoint to hedge-fund manager Michael Burry’s reported bearish position on the semiconductor sector. Applied Materials Stock Keeps Winning Upgrades
• Neutral Sentiment: Applied Materials’ valuation and strong recent appreciation leave the stock sensitive to profit-taking and any signs that semiconductor-capital-spending growth is slowing.
• Negative Sentiment: U.S. chip stocks extended losses as investors reassessed the financing and sustainability of the AI infrastructure boom, while renewed competition from China increased pressure across the sector. U.S. Chip Stocks Extend Losses on AI Financing and China Competition Fears
• Negative Sentiment: Reports that China is mass-producing domestic immersion DUV lithography equipment raise longer-term risks for Applied Materials, potentially reducing demand from Chinese fabs and limiting the company’s ability to benefit from AI-related investment there amid export controls. China’s Domestic Immersion DUV Push at Applied Materials

Analysts Set New Price Targets

A number of equities research analysts recently weighed in on AMAT shares. Needham & Company LLC boosted 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 lifted their target price on Applied Materials from $570.00 to $705.00 and gave the stock a "buy" rating in a research report on Wednesday, July 15th. Wells Fargo & Company boosted their target price on Applied Materials from $715.00 to $740.00 and gave the company an "overweight" rating in a report on Friday, June 26th. B. Riley Financial upped their target price on Applied Materials from $550.00 to $790.00 and gave the company a "buy" rating in a research report on Friday, June 26th. Finally, Jefferies Financial Group raised their price target on Applied Materials from $510.00 to $770.00 and gave the stock a "buy" rating in a research note on Friday, June 26th. One research analyst has rated the stock with a Strong Buy rating, twenty-seven have issued a Buy rating and six have assigned a Hold rating to the company's stock. According to data from MarketBeat, Applied Materials presently has a consensus rating of "Moderate Buy" and an average price target of $599.19.

Applied Materials Trading Down 7.8%

The company has a 50 day simple moving average of $546.28 and a 200 day simple moving average of $425.63. The company has a current ratio of 2.51, a quick ratio of 1.80 and a debt-to-equity ratio of 0.22. The stock has a market capitalization of $378.29 billion, a PE ratio of 44.74, a P/E/G ratio of 1.36 and a beta of 1.57.

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 for the quarter, compared to the consensus estimate of $7.68 billion. During the same period last year, the business posted $2.39 EPS. 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. Analysts predict that Applied Materials, Inc. will post 12.14 earnings per share for the current fiscal year.

Applied Materials Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be given a $0.53 dividend. 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 Buying and Selling

In other Applied Materials news, Director Thomas J. Iannotti sold 9,250 shares of the company's stock in a transaction on Tuesday, June 16th. The shares were sold at an average price of $599.77, for a total transaction of $5,547,872.50. Following the completion of the transaction, the director owned 40,559 shares in the company, valued at approximately $24,326,071.43. This represents a 18.57% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider Prabu G. Raja sold 50,000 shares of the firm's stock in a transaction on Thursday, June 4th. The stock was sold at an average price of $505.28, for a total transaction of $25,264,000.00. Following the completion of the sale, the insider owned 356,642 shares of the company's stock, valued at $180,204,069.76. This trade represents a 12.30% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 278,088 shares of company stock worth $169,654,805 in the last ninety days. Insiders own 0.30% of the company's stock.

Institutional Investors Weigh In On Applied Materials

A number of hedge funds have recently added to or reduced their stakes in the company. Evolve Private Wealth LLC lifted its position in shares of Applied Materials by 59.0% during the 1st quarter. Evolve Private Wealth LLC now owns 2,875 shares of the manufacturing equipment provider's stock valued at $983,000 after acquiring an additional 1,067 shares during the period. World Investment Advisors increased its position in shares of Applied Materials by 4.5% in the fourth 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 in the last quarter. WealthPlan Investment Management LLC acquired a new position in shares of Applied Materials during the 4th quarter worth $1,082,000. Dorato Capital Management acquired a new position in shares of Applied Materials during the 4th quarter worth $1,744,000. Finally, Ameritas Advisory Services LLC boosted its position in shares of Applied Materials by 183.7% in the 4th quarter. Ameritas Advisory Services LLC now owns 3,073 shares of the manufacturing equipment provider's stock worth $790,000 after buying an additional 1,990 shares in the last quarter. 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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.