Applied Materials (NASDAQ:AMAT) Trading 13.4% Higher - Should You Buy?

Key Points

• Applied Materials shares jumped 13.4% to around $668 on unusually heavy volume, reflecting a sharp investor reaction to recent company and sector news.
• The company unveiled new chipmaking systems for DRAM and advanced packaging aimed at AI chips, which analysts say could boost demand for its semiconductor equipment as AI infrastructure spending grows.
• Wall Street sentiment remains bullish, with multiple firms raising price targets and 27 analysts rating the stock a Buy, though some commentary warns the stock may be getting expensive after its recent run-up.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) rose 13.4% during mid-day trading on Thursday . The company traded as high as $669.22 and last traded at $668.00. 16,006,438 shares changed hands during trading, an increase of 103% from the average session volume of 7,879,589 shares. The stock had previously closed at $588.97.

Key Stories Impacting Applied Materials

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

• Positive Sentiment: Applied Materials unveiled new chipmaking systems designed to accelerate DRAM and advanced packaging for AI chips, including tools aimed at improving memory speed, efficiency, yield, and defect inspection. Applied Materials Introduces New Systems to Accelerate DRAM and Advanced Packaging for AI Chips
• Positive Sentiment: Analysts and commentators say the launch strengthens AMAT’s position in the AI buildout, with price-target upgrades and bullish calls pointing to more demand for semiconductor equipment. Here’s Why Applied Materials Stock (AMAT) Is Soaring Today
• Positive Sentiment: Wells Fargo reportedly raised its price target to a Street-high level and maintained a positive rating, reinforcing the view that AI infrastructure spending could keep driving orders for AMAT’s equipment. Why Applied Materials Just Got a New Street-High Price Target
• Neutral Sentiment: Broader AI-chip optimism is also lifting the stock, as Micron-led momentum and general demand for memory/HBM equipment improve sentiment across the chip equipment group. Micron Sparks Fresh AI Stock Rally
• Negative Sentiment: Some prior articles noted valuation concerns after the recent run-up, suggesting the stock can be sensitive if AI demand or customer spending slows. Applied Materials Stock Looks Pricey—Can AI Demand Justify the Rally?

Analyst Ratings Changes

A number of equities analysts have recently commented on the stock. Wolfe Research lifted their target price on shares of Applied Materials from $500.00 to $550.00 and gave the company an "outperform" rating in a report on Friday, May 15th. Barclays lifted their target price on shares of Applied Materials from $500.00 to $590.00 and gave the company an "overweight" rating in a report on Thursday, June 11th. UBS Group lifted their target price on Applied Materials from $515.00 to $570.00 and gave the stock a "buy" rating in a research report on Wednesday, June 10th. TD Cowen increased their price target on Applied Materials from $450.00 to $525.00 and gave the stock a "buy" rating in a research note on Friday, May 15th. Finally, KeyCorp lifted their target price on Applied Materials from $450.00 to $550.00 and gave the stock an "overweight" rating in a report on Friday, May 15th. Twenty-seven analysts have rated the stock with a Buy rating and eight have assigned a Hold rating to the company. According to MarketBeat.com, Applied Materials presently has an average rating of "Moderate Buy" and an average target price of $501.26.

Applied Materials Stock Up 13.4%

The firm's fifty day moving average is $463.44 and its 200-day moving average is $372.78. 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 $530.36 billion, a P/E ratio of 62.72, a P/E/G ratio of 1.63 and a beta of 1.67.

Applied Materials (NASDAQ:AMAT - Get Free Report) last issued its quarterly earnings results on Thursday, May 14th. The manufacturing equipment provider reported $2.86 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.68 by $0.18. The business had revenue of $7.91 billion for the quarter, compared to analyst estimates of $7.68 billion. Applied Materials had a return on equity of 36.97% and a net margin of 29.31%.The firm's revenue for the quarter was up 11.4% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $2.39 earnings per share. Applied Materials has set its Q3 2026 guidance at 3.160-3.560 EPS. As a group, equities research analysts predict that Applied Materials, Inc. will post 12.1 earnings per share for the current year.

Applied Materials Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be issued a dividend of $0.53 per share. This represents a $2.12 annualized dividend and a dividend yield of 0.3%. The ex-dividend date is Thursday, August 20th. Applied Materials's payout ratio is 19.91%.

Insiders Place Their Bets

In related news, insider Prabu G. Raja sold 50,000 shares of the company's stock in a transaction on Thursday, June 4th. The shares were sold at an average price of $505.28, for a total value of $25,264,000.00. Following the completion of the transaction, the insider directly owned 356,642 shares of the company's stock, valued at approximately $180,204,069.76. This represents a 12.30% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, SVP Timothy M. Deane sold 8,621 shares of the company's stock in a transaction that occurred on Monday, June 15th. The stock was sold at an average price of $590.76, for a total value of $5,092,941.96. Following the transaction, the senior vice president directly owned 134,631 shares of the company's stock, valued at approximately $79,534,609.56. This trade represents a 6.02% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 199,767 shares of company stock worth $114,104,709 in the last three months. 0.30% of the stock is owned by corporate insiders.

Institutional Trading of Applied Materials

A number of hedge funds and other institutional investors have recently modified their holdings of AMAT. Basecamp Wealth Advisors LLC boosted its holdings in Applied Materials by 0.7% in the 1st quarter. Basecamp Wealth Advisors LLC now owns 3,288 shares of the manufacturing equipment provider's stock worth $1,124,000 after buying an additional 22 shares during the period. Private Wealth Management Group LLC raised its holdings in Applied Materials by 4.9% during the 1st quarter. Private Wealth Management Group LLC now owns 531 shares of the manufacturing equipment provider's stock valued at $181,000 after acquiring an additional 25 shares during the period. One Day In July LLC lifted its position in shares of Applied Materials by 2.4% during the first quarter. One Day In July LLC now owns 1,089 shares of the manufacturing equipment provider's stock worth $372,000 after acquiring an additional 26 shares in the last quarter. Pinnacle Bancorp Inc. lifted its position in shares of Applied Materials by 1.3% during the first quarter. Pinnacle Bancorp Inc. now owns 2,082 shares of the manufacturing equipment provider's stock worth $712,000 after acquiring an additional 27 shares in the last quarter. Finally, Horst & Graben Wealth Management LLC boosted its holdings in shares of Applied Materials by 2.1% in the first quarter. Horst & Graben Wealth Management LLC now owns 1,304 shares of the manufacturing equipment provider's stock worth $446,000 after acquiring an additional 27 shares during the period. 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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