Applied Materials (NASDAQ:AMAT) Shares Down 2% - Here's Why

Key Points

• Applied Materials shares fell 2% to approximately $404.98 amid ETF selling and concerns that much of the company’s AI-driven growth is already reflected in its valuation.
• The long-term outlook remains positive: e-beam wafer-inspection demand is projected to grow substantially through 2030, while Applied Materials recently beat earnings and revenue expectations, with sales up 24.8% year over year.
• Wall Street maintains a generally bullish view, with a “Moderate Buy” consensus and an average price target of $632.70, although some analysts have recently lowered targets and insiders have sold shares.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) shares were down 2% on Tuesday. The stock traded as low as $399.03 and last traded at $404.98. Approximately 6,799,414 shares were traded during mid-day trading, a decline of 14% from the average daily volume of 7,881,442 shares. The stock had previously closed at $413.11.

Key Stories Impacting Applied Materials

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

• Positive Sentiment: A new industry report projects the global e-beam wafer-inspection market will expand from $1.3 billion in 2024 to $3.6 billion by 2030. Applied Materials is identified as a key participant, with shrinking chip nodes, higher yield requirements and AI-enabled inspection data supporting long-term demand for its equipment. E-Beam Wafer Inspection Systems Market Forecasts Growth
• Positive Sentiment: Analyst commentary remains constructive after Applied Materials’ recent earnings beat. The company reported quarterly revenue of $9.12 billion and earnings of $3.50 per share, ahead of consensus estimates, while revenue grew 24.8% year over year. Some analysts reportedly maintain price targets substantially above the current trading range, pointing to expected growth in semiconductor capital spending. Applied Materials Cratered 20% Since July
• Neutral Sentiment: Applied Materials was named an honoree of The Conference Board’s inaugural 2027 Innovation Awards. The recognition supports the company’s technology profile but is unlikely to materially affect near-term earnings or valuation. The Conference Board Announces 2027 Innovation Awards Honorees
• Neutral Sentiment: Applied Materials is also profiled as a beneficiary of the flexible-electronics market, which is forecast to grow from $32 billion in 2024 to $89.4 billion by 2030. This represents a potential growth avenue, although the report does not announce a specific contract or financial impact. Flexible Electronics Global Strategic Business Report
• Negative Sentiment: ETF investors sold approximately $58.8 million of AMAT shares on October 15, adding near-term technical and supply pressure. Applied Materials Sees Net ETF Selling
• Negative Sentiment: Commentary also warns that much of Applied Materials’ artificial-intelligence growth may already be reflected in its valuation after a strong one-year rally. That raises the risk of profit-taking and higher expectations ahead of future results. Applied Materials AI Growth Already Priced In

Wall Street Analyst Weigh In

Several equities analysts have commented on the company. Sanford C. Bernstein increased their price target on Applied Materials from $675.00 to $700.00 and gave the company an "outperform" rating in a report on Friday, August 14th. B. Riley Financial restated a "buy" rating and issued a $700.00 price objective (down from $790.00) on shares of Applied Materials in a research note on Friday, August 14th. TD Cowen reaffirmed a "buy" rating and set a $700.00 price objective on shares of Applied Materials in a report on Friday, August 14th. HSBC lowered their target price on shares of Applied Materials from $683.00 to $641.00 and set a "buy" rating on the stock in a research note on Friday, August 14th. Finally, Weiss Ratings downgraded shares of Applied Materials from a "buy (b)" rating to a "buy (b-)" rating in a report on Wednesday, September 9th. Thirty equities research analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the stock. According to MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average target price of $632.70.

Applied Materials Price Performance

The company has a current ratio of 2.42, a quick ratio of 1.79 and a debt-to-equity ratio of 0.20. The stock has a fifty day simple moving average of $478.34 and a 200-day simple moving average of $486.73. The stock has a market cap of $321.39 billion, a price-to-earnings ratio of 34.91, a price-to-earnings-growth ratio of 1.14 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 the consensus estimate of $3.40 by $0.10. Applied Materials had a return on equity of 38.02% and a net margin of 30.05%. The company had revenue of $9.12 billion during the quarter, compared to analysts' expectations of $8.99 billion. During the same period in the prior year, the business earned $2.48 earnings per share. Applied Materials's revenue for the quarter was up 24.8% compared to the same quarter last year. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. As a group, equities research analysts expect that Applied Materials, Inc. will post 12.79 EPS for the current year.

Applied Materials Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Thursday, December 10th. Shareholders of record on Thursday, November 19th will be issued a $0.53 dividend. The ex-dividend date of this dividend is Thursday, November 19th. This represents a $2.12 dividend on an annualized basis and a yield of 0.5%. Applied Materials's dividend payout ratio is 18.28%.

Insiders Place Their Bets

In other news, CFO Brice Hill sold 7,500 shares of the company's stock in a transaction dated Tuesday, August 25th. The shares were sold at an average price of $479.25, for a total transaction of $3,594,375.00. Following the completion of the transaction, the chief financial officer owned 128,613 shares of the company's stock, valued at approximately $61,637,780.25. This represents a 5.51% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Judy Bruner sold 1,000 shares of the stock in a transaction dated Tuesday, September 8th. The shares were sold at an average price of $465.00, for a total transaction of $465,000.00. Following the completion of the sale, the director owned 25,544 shares of the company's stock, valued at approximately $11,877,960. The trade was a 3.77% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 9,225 shares of company stock worth $4,454,181 in the last ninety days. Insiders own 0.30% of the company's stock.

Hedge Funds Weigh In On Applied Materials

Several institutional investors and hedge funds have recently added to or reduced their stakes in AMAT. BlackRock Inc. grew its stake in Applied Materials by 1.6% in the second quarter. BlackRock Inc. now owns 80,212,518 shares of the manufacturing equipment provider's stock valued at $57,993,650,000 after purchasing an additional 1,237,685 shares in the last quarter. State Street Corp raised its stake in shares of Applied Materials by 85.4% during the 2nd quarter. State Street Corp now owns 69,525,842 shares of the manufacturing equipment provider's stock worth $50,267,184,000 after purchasing an additional 32,018,892 shares in the last quarter. Amundi raised its stake in shares of Applied Materials by 19.0% during the 2nd quarter. Amundi now owns 7,808,207 shares of the manufacturing equipment provider's stock worth $5,645,344,000 after purchasing an additional 1,246,876 shares in the last quarter. Van ECK Associates Corp boosted its holdings in shares of Applied Materials by 16.2% in the 2nd 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 last quarter. Finally, Bank of America Corp DE acquired a new stake in shares of Applied Materials in the 2nd quarter valued at approximately $5,252,863,000. 80.56% of the stock is currently 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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.