Applied Materials (NASDAQ:AMAT) Stock Price Up 1.1% - Should You Buy?

Key Points

• Applied Materials shares rose 1.1% in mid-day trading, reaching as high as $438.13 after the company reported strong quarterly results and upbeat investor sentiment.
• Recent earnings beat expectations: the chip-equipment maker posted EPS of $2.86 versus $2.68 expected and revenue of $7.91 billion versus $7.68 billion expected, with revenue up 11.4% year over year.
• Analysts remain bullish after multiple target-price increases, including JPMorgan, Argus, and KeyCorp; the stock now has a consensus “Moderate Buy” rating and an average target price of $465.14.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report)'s stock price rose 1.1% during mid-day trading on Friday . The stock traded as high as $438.13 and last traded at $432.16. Approximately 4,796,883 shares were traded during mid-day trading, a decline of 35% from the average daily volume of 7,349,367 shares. The stock had previously closed at $427.36.

Analyst Ratings Changes

Several research analysts recently weighed in on the company. JPMorgan Chase & Co. raised their target price on Applied Materials from $400.00 to $515.00 and gave the company an "overweight" rating in a research note on Friday, May 15th. Argus raised their target price on Applied Materials from $420.00 to $500.00 and gave the company a "buy" rating in a research note on Tuesday. KeyCorp raised their target price on Applied Materials from $450.00 to $550.00 and gave the company an "overweight" rating in a research note on Friday, May 15th. Erste Group Bank raised Applied Materials from a "hold" rating to a "buy" rating in a research note on Monday, April 27th. Finally, Morgan Stanley reaffirmed an "equal weight" rating and set a $502.00 target price (up from $454.00) on shares of Applied Materials in a research note on Friday, May 15th. Twenty-seven research analysts have rated the stock with a Buy rating and eight have issued a Hold rating to the company's stock. According to data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average target price of $465.14.

Applied Materials Price Performance

The company has a 50-day moving average price of $385.47 and a 200-day moving average price of $325.31. The company has a market capitalization of $342.97 billion, a price-to-earnings ratio of 40.58, a price-to-earnings-growth ratio of 1.20 and a beta of 1.66. The company has a debt-to-equity ratio of 0.22, a quick ratio of 1.80 and a current ratio of 2.51.

Applied Materials (NASDAQ:AMAT - Get Free Report) last announced its quarterly earnings results on Thursday, May 14th. The manufacturing equipment provider reported $2.86 earnings per share (EPS) for the quarter, topping 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 in the prior year, the company earned $2.39 earnings per share. The company's revenue for the quarter 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. On average, equities research analysts expect that Applied Materials, Inc. will post 12.02 EPS for the current fiscal year.

Applied Materials Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, June 11th. Investors of record on Thursday, May 21st will be given a dividend of $0.53 per share. 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 payout ratio is currently 17.28%.

Insider Activity at Applied Materials

In related news, CAO Adam Sanders sold 534 shares of the stock in a transaction that occurred on Tuesday, February 24th. The stock was 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 directly owned 4,625 shares of the company's stock, valued at approximately $1,753,615. This represents a 10.35% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, Director Judy Bruner sold 3,969 shares of the firm's stock in a transaction that occurred 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 sale, the director directly owned 28,589 shares of the company's stock, valued at approximately $10,778,624.78. The trade was a 12.19% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 7,003 shares of company stock valued at $2,678,139 over the last three months. Insiders own 0.30% of the company's stock.

Institutional Trading of Applied Materials

A number of hedge funds have recently made changes to their positions in AMAT. Cornerstone Financial Management LLC acquired a new position in Applied Materials during the 4th quarter worth about $25,000. Redmont Wealth Advisors LLC bought a new position in shares of Applied Materials in the 3rd quarter worth about $26,000. Wilkerson Advisory Group LLC bought a new position in shares of Applied Materials in the 4th quarter worth about $26,000. Financial Freedom LLC bought a new position in shares of Applied Materials in the 1st quarter worth about $28,000. Finally, Highline Wealth Partners LLC increased its position in Applied Materials by 48.7% in the 4th quarter. Highline Wealth Partners LLC now owns 116 shares of the manufacturing equipment provider's stock valued at $30,000 after buying an additional 38 shares in the last quarter. 80.56% of the stock is owned by institutional investors and hedge funds.

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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