Applied Materials (NASDAQ:AMAT) Trading Down 10% - Here's Why

Key Points

• Applied Materials shares fell 10% on Wednesday, dropping from a prior close of $723 to around $651, with trading volume jumping to nearly 15.8 million shares, well above average.
• Despite the pullback, analyst sentiment remains very bullish: several firms recently raised price targets, including Cantor Fitzgerald to $850 and Jefferies to $770, while the company still holds a “Moderate Buy” consensus rating.
• The stock has had a huge run on AI-driven semiconductor demand, but commentary suggests it may now be overbought and vulnerable to a near-term correction as chip-sector momentum cools.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) shares fell 10% during trading on Wednesday . The company traded as low as $639.06 and last traded at $650.91. Approximately 15,772,370 shares changed hands during trading, an increase of 92% from the average daily volume of 8,230,612 shares. The stock had previously closed at $723.00.

Key Applied Materials News

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

• Positive Sentiment: Analysts continued to raise their outlooks on Applied Materials, including a price-target hike from Cantor Fitzgerald to $850 and higher earnings estimates from Erste Group Bank, reinforcing expectations for strong future growth. Applied Materials (AMAT) Remains Favored as ASML Emerges as Top Catch-Up Trade
• Positive Sentiment: Applied Materials has been one of the hottest names in semiconductors, hitting all-time highs and posting its best monthly rally since 1975 as AI-related chip spending lifted demand forecasts and sentiment toward chip-equipment makers. Stock Of The Month: Applied Materials Notches Best Rally Since 1975
• Positive Sentiment: Broader semiconductor strength is also supporting AMAT, with investors buying into chip ETFs and equipment stocks as Micron’s AI-led memory surge and the broader $2 trillion AI chip market rally keep the group in focus. Semiconductor ETFs to Buy as Micron Leads 2T AI-Led Chip Market Rally
• Neutral Sentiment: News flow around AMAT remains heavily focused on valuation and technical momentum, with some commentary warning the stock is extremely overbought and may be vulnerable to a pullback after its sharp run. Stock Of The Day: Is This The Top For Applied Materials?
• Negative Sentiment: One market-wide article noted that chip stocks were the main drag on otherwise stronger trading, which could limit near-term upside for Applied Materials if semiconductor sentiment cools. Meta, CoreWeave, Salesforce, Corning, Bending Spoons, and More Stocks That Explain Today’s Market

Analyst Upgrades and Downgrades

AMAT has been the subject of a number of research analyst reports. Raymond James Financial set a $650.00 target price on Applied Materials in a research report on Wednesday, June 10th. B. Riley Financial boosted their price objective on Applied Materials from $550.00 to $790.00 and gave the company a "buy" rating in a research note on Friday, June 26th. Sanford C. Bernstein restated an "outperform" rating and set a $525.00 target price on shares of Applied Materials in a research report on Friday, May 15th. Wall Street Zen raised shares of Applied Materials from a "hold" rating to a "buy" rating in a report on Saturday, May 23rd. Finally, Jefferies Financial Group increased their price target on shares of Applied Materials from $510.00 to $770.00 and gave the stock a "buy" rating in a research note on Friday, June 26th. Twenty-seven investment analysts have rated the stock with a Buy rating and eight have issued a Hold rating to the company. According to MarketBeat, the company has a consensus rating of "Moderate Buy" and a consensus target price of $553.56.

Applied Materials Stock Down 10.0%

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 company has a market capitalization of $516.80 billion, a price-to-earnings ratio of 61.12, a PEG ratio of 1.93 and a beta of 1.67. The firm's 50 day simple moving average is $486.16 and its 200-day simple moving average is $384.29.

Applied Materials (NASDAQ:AMAT - Get Free Report) last released its earnings results on Thursday, May 14th. The manufacturing equipment provider reported $2.86 EPS for the quarter, topping the consensus estimate of $2.68 by $0.18. The company had revenue of $7.91 billion during the quarter, compared to analysts' expectations of $7.68 billion. Applied Materials had a net margin of 29.31% and a return on equity of 36.97%. The business's revenue was up 11.4% on a year-over-year basis. During the same quarter last year, the business earned $2.39 EPS. Applied Materials has set its Q3 2026 guidance at 3.160-3.560 EPS. On average, sell-side analysts anticipate that Applied Materials, Inc. will post 12.11 EPS for the current fiscal year.

Applied Materials Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be issued a $0.53 dividend. This represents a $2.12 dividend on an annualized basis and a dividend yield of 0.3%. The ex-dividend date is Thursday, August 20th. Applied Materials's dividend payout ratio (DPR) is currently 19.91%.

Insider Transactions at Applied Materials

In other news, insider Prabu G. Raja sold 10,000 shares of Applied Materials stock in a transaction that occurred on Thursday, June 18th. The shares were sold at an average price of $633.53, for a total transaction of $6,335,300.00. Following the completion of the sale, the insider directly owned 346,642 shares in the company, valued at approximately $219,608,106.26. This trade represents a 2.80% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Thomas J. Iannotti sold 9,250 shares of Applied Materials stock in a transaction that occurred 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 sale, the director owned 40,559 shares of the company's stock, valued at approximately $24,326,071.43. The trade was a 18.57% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders have sold 199,767 shares of company stock valued at $114,104,709. 0.30% of the stock is owned by company insiders.

Hedge Funds Weigh In On Applied Materials

Hedge funds have recently bought and sold shares of the company. Basecamp Wealth Advisors LLC raised its stake in shares of Applied Materials by 0.7% during 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 last quarter. Private Wealth Management Group LLC raised its position in Applied Materials by 4.9% during the first quarter. Private Wealth Management Group LLC now owns 531 shares of the manufacturing equipment provider's stock worth $181,000 after acquiring an additional 25 shares during the last quarter. One Day In July LLC lifted its holdings in shares of Applied Materials by 2.4% in the first quarter. One Day In July LLC now owns 1,089 shares of the manufacturing equipment provider's stock valued at $372,000 after purchasing an additional 26 shares in the last quarter. Pinnacle Bancorp Inc. grew its position in shares of Applied Materials by 1.3% in the first quarter. Pinnacle Bancorp Inc. now owns 2,082 shares of the manufacturing equipment provider's stock valued at $712,000 after purchasing an additional 27 shares during the last quarter. Finally, Horst & Graben Wealth Management LLC grew its position 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 valued at $446,000 after purchasing an additional 27 shares during the last quarter. 80.56% of the stock is owned by hedge funds and other institutional investors.

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.

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