Applied Materials (NASDAQ:AMAT) Trading 1.8% Higher - Should You Buy?

Key Points

• Shares ticked up ~1.8% to about $397 after Applied Materials unveiled new tools for 2nm AI/HPC chips (Precision Selective Nitride PECVD and Trillium ALD) and was reported to be contacted by Elon Musk’s Terafab team, giving the company clear catalysts to capture AI/HPC node transitions.
• Wall Street reaction is largely positive with multiple upgrades and higher price targets (e.g., B. Riley $485, Stifel $450, Wells Fargo $435), but MarketBeat’s average target of $368.29 shows divergent valuation views.
• Operationally AMAT beat Q1 EPS expectations ($2.38 vs. $2.21) despite revenue falling ~2.1% YoY, set Q2 guidance of $2.44–2.84 EPS, raised its quarterly dividend to $0.53, and faces short‑term volatility risk from lumpy orders and competitive valuation pressure.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report)'s stock price traded up 1.8% during mid-day trading on Friday . The stock traded as high as $400.50 and last traded at $396.94. 5,976,172 shares were traded during trading, a decline of 19% from the average session volume of 7,405,564 shares. The stock had previously closed at $389.90.

Key Stories Impacting Applied Materials

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

• Positive Sentiment: New tools for next‑gen chips: AMAT unveiled the Precision Selective Nitride PECVD and Trillium ALD systems aimed at 2nm AI and HPC chips — this strengthens its content per chip and positions it to capture AI/HPC node transitions. Article Title
• Positive Sentiment: Potential large customer for fabs: Bloomberg/press reports say Elon Musk’s Terafab team has contacted AMAT (among others) for equipment quotes — if that project proceeds it could add meaningful new demand. Article Title
• Positive Sentiment: Analyst bullishness: B. Riley raised its price target on AMAT to $485 (Buy), reflecting a multi‑year AI-related outlook upgrade that supports higher valuations. Article Title
• Neutral Sentiment: Positive industry signals: peers TSMC and (expected) Lam Research results point to strong AI/HPC and DRAM spending, which is supportive for AMAT as an equipment supplier. Article Title Article Title
• Neutral Sentiment: Momentum & coverage: multiple Zacks pieces note heavy investor interest and recent strong short‑term performance (momentum), which can amplify moves but may also lead to volatile reversals. Article Title
• Negative Sentiment: Competitive and valuation pressure: relative comparisons (NVDA vs AMAT) and broader peer valuations (ASML/US peers) highlight that investors may prefer higher‑growth alternatives like NVIDIA, which could limit further multiple expansion for AMAT. Article Title
• Negative Sentiment: Near‑term softness in revenue: most recent quarter showed slight year‑over‑year revenue decline (about -2.1%), so while earnings beat and guidance were constructive, demand remains lumpy and could lead to volatility if orders don’t accelerate.

Wall Street Analyst Weigh In

AMAT has been the subject of a number of research analyst reports. Stifel Nicolaus upped their target price on Applied Materials from $340.00 to $450.00 and gave the company a "buy" rating in a research report on Friday, February 13th. DZ Bank upgraded Applied Materials to a "hold" rating in a research note on Monday, February 16th. Wells Fargo & Company boosted their price objective on Applied Materials from $350.00 to $435.00 and gave the company an "overweight" rating in a research note on Friday, February 13th. KGI Securities upgraded Applied Materials to an "outperform" rating and set a $425.00 price objective for the company in a research note on Friday, February 13th. Finally, Erste Group Bank upgraded Applied Materials to a "hold" rating in a research note on Tuesday, March 24th. One analyst has rated the stock with a Strong Buy rating, twenty-six have issued a Buy rating and seven have assigned a Hold rating to the company. According to data from MarketBeat, Applied Materials has an average rating of "Moderate Buy" and an average target price of $368.29.

Applied Materials Stock Performance

The stock has a 50 day simple moving average of $358.40 and a two-hundred day simple moving average of $293.32. The company has a debt-to-equity ratio of 0.30, a current ratio of 2.71 and a quick ratio of 1.94. The company has a market cap of $315.02 billion, a PE ratio of 40.63, a PEG ratio of 1.76 and a beta of 1.64.

Applied Materials (NASDAQ:AMAT - Get Free Report) last posted its quarterly earnings data on Thursday, February 12th. The manufacturing equipment provider reported $2.38 earnings per share for the quarter, topping analysts' consensus estimates of $2.21 by $0.17. Applied Materials had a return on equity of 37.52% and a net margin of 27.78%.The company had revenue of $7.01 billion during the quarter, compared to analysts' expectations of $6.88 billion. During the same period last year, the firm earned $2.38 EPS. The firm's revenue for the quarter was down 2.1% on a year-over-year basis. Applied Materials has set its Q2 2026 guidance at 2.440-2.840 EPS. Equities analysts predict that Applied Materials, Inc. will post 9.38 EPS for the current year.

Applied Materials Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be given a dividend of $0.53 per share. This represents a $2.12 dividend on an annualized basis and a yield of 0.5%. The ex-dividend date of this dividend is Thursday, May 21st. This is a positive change from Applied Materials's previous quarterly dividend of $0.46. Applied Materials's payout ratio is 21.70%.

Insiders Place Their Bets

In other Applied Materials news, CFO Brice Hill sold 5,000 shares of the stock in a transaction that occurred on Tuesday, February 17th. The stock was sold at an average price of $361.21, for a total transaction of $1,806,050.00. Following the completion of the sale, the chief financial officer directly owned 138,565 shares of the company's stock, valued at approximately $50,051,063.65. This trade represents a 3.48% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director Judy Bruner sold 2,500 shares of the 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 sale, the director directly owned 26,089 shares of the company's stock, valued at $10,219,322.19. The trade was a 8.74% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last ninety days, insiders sold 12,003 shares of company stock valued at $4,484,189. 0.30% of the stock is owned by company insiders.

Institutional Trading of Applied Materials

A number of institutional investors have recently modified their holdings of the business. AdvisorNet Financial Inc boosted its stake in shares of Applied Materials by 2.2% in the first quarter. AdvisorNet Financial Inc now owns 2,222 shares of the manufacturing equipment provider's stock valued at $759,000 after buying an additional 48 shares in the last quarter. Community Bank & Trust Waco Texas boosted its stake in shares of Applied Materials by 1.2% in the first quarter. Community Bank & Trust Waco Texas now owns 5,551 shares of the manufacturing equipment provider's stock valued at $1,897,000 after buying an additional 65 shares in the last quarter. SVB Wealth LLC boosted its stake in shares of Applied Materials by 6.5% in the first quarter. SVB Wealth LLC now owns 23,873 shares of the manufacturing equipment provider's stock valued at $8,159,000 after buying an additional 1,451 shares in the last quarter. Cornell Pochily Investment Advisors Inc. purchased a new stake in shares of Applied Materials in the first quarter valued at approximately $216,000. Finally, Anchyra Partners LLC boosted its stake in shares of Applied Materials by 3.4% in the first quarter. Anchyra Partners LLC now owns 3,377 shares of the manufacturing equipment provider's stock valued at $1,154,000 after buying an additional 110 shares in the last quarter. 80.56% of the stock is currently owned by hedge funds and other institutional investors.

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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