Applied Materials (NASDAQ:AMAT) Shares Climb 2% - Still a Buy?

Key Points

• Applied Materials shares rose 2% to $381.92 in Tuesday trading, though volume was 30% below its average and the stock has reportedly fallen nearly 29% over the past month.
• Recent results showed strong growth: adjusted EPS increased 41%, DRAM revenue rose 52%, and the latest quarterly EPS and revenue beat analyst estimates. The company also raised revenue guidance, while its upcoming November 12 results may be a key test of demand and execution.
• Analysts retain a Moderate Buy consensus, with a $632.01 average price target, although Morgan Stanley cut its target and flagged execution risks. Applied Materials also declared a quarterly dividend of $0.53 per share.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) shares shot up 2% during mid-day trading on Tuesday. The stock traded as high as $390.00 and last traded at $381.92. 5,521,233 shares traded hands during trading, a decline of 30% from the average session volume of 7,860,765 shares. The stock had previously closed at $374.53.

Applied Materials News Summary

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

• Positive Sentiment: Recent fundamentals have been strong: adjusted earnings per share grew 41%, DRAM revenue rose 52%, and the company raised revenue guidance. Ongoing investment in capacity and hybrid-bonding technology, along with a larger stake in Besi, could support future growth. Article: Did Earnings Growth Just Shift Applied Materials Investment Narrative?
• Neutral Sentiment: Morgan Stanley cut its price target to $538 from $563 and maintained an Equal Weight/Hold rating. The lower target reflects a more cautious view, although it remains above the price cited in the report; the analyst sees promising demand balanced by execution risks. Article: Applied Materials—Promising Demand Offset by Execution Risks
• Negative Sentiment: AMAT has fallen nearly 29% in a month amid a broader semiconductor-sector selloff, including pressure linked to Intel’s outlook and ETF selling. The November 12 results could either reassure investors or deepen concerns if demand, guidance, or execution disappoints. Article: Applied Materials Just Dropped 29% in a Month

Analysts Set New Price Targets

A number of equities analysts have recently commented on the stock. JPMorgan Chase & Co. lifted their target price on shares of Applied Materials from $515.00 to $660.00 and gave the company an "overweight" rating in a report on Friday, August 14th. Evercore set a $590.00 price target on Applied Materials in a research note on Thursday, October 15th. B. Riley Financial restated a "buy" rating and set a $700.00 target price (down from $790.00) on shares of Applied Materials in a research report on Friday, August 14th. Needham & Company LLC dropped their target price on shares of Applied Materials from $740.00 to $580.00 and set a "buy" rating for the company in a report on Friday, October 16th. Finally, The Goldman Sachs Group lifted their price target on shares of Applied Materials from $645.00 to $670.00 and gave the company a "buy" rating in a research report on Friday, August 14th. Thirty research analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the stock. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $632.01.

Applied Materials Price Performance

The company's fifty day moving average is $455.30 and its 200 day moving average is $443.98. The company has a quick ratio of 1.79, a current ratio of 2.42 and a debt-to-equity ratio of 0.20. The stock has a market cap of $303.09 billion, a PE ratio of 32.92, a price-to-earnings-growth ratio of 1.16 and a beta of 1.60.

Applied Materials (NASDAQ:AMAT - Get Free Report) last posted its quarterly earnings data on Thursday, August 13th. The manufacturing equipment provider reported $3.50 earnings per share for the quarter, beating analysts' consensus estimates of $3.40 by $0.10. The company had revenue of $9.12 billion during the quarter, compared to analysts' expectations of $8.99 billion. Applied Materials had a net margin of 30.05% and a return on equity of 38.02%. The firm's revenue for the quarter was up 24.8% on a year-over-year basis. During the same period in the prior year, the company posted $2.48 EPS. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. As a group, sell-side analysts anticipate that Applied Materials, Inc. will post 12.79 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, December 10th. Investors of record on Thursday, November 19th will be issued a dividend of $0.53 per share. This represents a $2.12 annualized dividend and a dividend yield of 0.6%. The ex-dividend date is Thursday, November 19th. Applied Materials's dividend payout ratio (DPR) is currently 18.28%.

Insider Activity at Applied Materials

In related news, CAO Adam Sanders sold 725 shares of Applied Materials stock in a transaction on Friday, October 2nd. The shares were sold at an average price of $544.56, for a total value of $394,806.00. Following the completion of the sale, the chief accounting officer owned 3,181 shares of the company's stock, valued at approximately $1,732,245.36. The trade was a 18.56% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Judy Bruner sold 1,000 shares of the company's stock in a transaction dated Tuesday, September 8th. The stock was sold at an average price of $465.00, for a total value of $465,000.00. Following the sale, the director owned 25,544 shares of the company's stock, valued at approximately $11,877,960. This trade represents a 3.77% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 9,225 shares of company stock valued at $4,454,181. 0.30% of the stock is currently owned by corporate insiders.

Institutional Trading of Applied Materials

A number of hedge funds have recently bought and sold shares of the stock. BlackRock Inc. lifted its holdings in Applied Materials by 1.6% in the 2nd quarter. BlackRock Inc. now owns 80,212,518 shares of the manufacturing equipment provider's stock worth $57,993,650,000 after buying an additional 1,237,685 shares during the period. State Street Corp increased its stake in shares of Applied Materials by 85.4% during the second quarter. State Street Corp now owns 69,525,842 shares of the manufacturing equipment provider's stock valued at $50,267,184,000 after buying an additional 32,018,892 shares during the period. Amundi increased its stake in shares of Applied Materials by 19.0% during the second quarter. Amundi now owns 7,808,207 shares of the manufacturing equipment provider's stock valued at $5,645,344,000 after buying an additional 1,246,876 shares during the period. Van ECK Associates Corp increased its stake in shares of Applied Materials by 16.2% during the second quarter. Van ECK Associates Corp now owns 7,713,599 shares of the manufacturing equipment provider's stock valued at $5,576,932,000 after buying an additional 1,073,879 shares during the period. Finally, Bank of America Corp DE bought a new position in shares of Applied Materials during the second quarter valued at approximately $5,252,863,000. 80.56% of the stock is owned by institutional investors.

Applied Materials Company Profile

Applied Materials, Inc is a technology company that supplies equipment, services and software used to manufacture semiconductors and advanced displays. Its products help customers fabricate the integrated circuits and other components used in computers, mobile devices, data centers, automobiles and a range of connected technologies.

The company's offerings include systems for materials engineering, wafer fabrication, inspection and process control, along with equipment and services designed to improve manufacturing productivity and yield.

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