Applied Materials (NASDAQ:AMAT) Shares Down 3.7% - Should You Sell?

Key Points

• Applied Materials shares fell 3.7% to $430.01 amid a broader semiconductor selloff and concerns that the company’s 2030 Investor Day targets were not ambitious or specific enough to support its premium valuation.
• The long-term outlook remains supported by strong semiconductor-equipment demand, AI-related capacity expansion and the new $5 billion EPIC Center. Recent results showed revenue growth of 24.8% year over year and an earnings beat.
• Analyst sentiment is generally positive but mixed, with a consensus “Moderate Buy” rating and $637.14 price target; however, the stock is trading below its 50-day and 200-day moving averages, adding near-term technical pressure.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) shares dropped 3.7% on Thursday. The company traded as low as $418.24 and last traded at $430.01. Approximately 12,119,000 shares traded hands during mid-day trading, an increase of 54% from the average session volume of 7,888,926 shares. The stock had previously closed at $446.63.

More Applied Materials News

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

• Positive Sentiment: Applied Materials unveiled its $5 billion EPIC Center in Sunnyvale, California, described as the world’s largest semiconductor equipment and process-technology research facility. The center is intended to accelerate chip development and reduce the time required to bring new semiconductor technologies to market, with Intel, Micron, SK Hynix and Samsung among its partners. Applied Materials opens $5B semiconductor innovation center
• Positive Sentiment: Several analysts remain constructive. RBC reaffirmed its “outperform” rating with a $600 price target, while other coverage points to potential upside based on positive earnings-estimate revisions and strong demand for semiconductor manufacturing equipment. Wall Street Analysts Think Applied Materials Could Surge
• Positive Sentiment: Applied Materials’ broad wafer-fabrication equipment portfolio positions it to benefit as chipmakers expand capacity for artificial intelligence and other advanced applications. Recent earnings also showed 24.8% year-over-year revenue growth and an earnings beat, supporting the longer-term investment case. ASML vs. Applied Materials
• Neutral Sentiment: Analyst opinion is mixed: some firms are bullish, while comparison articles frame Applied Materials as a quality chip-equipment leader but note that valuation and competitive positioning must be weighed against alternatives such as ASML and Broadcom.
• Negative Sentiment: The immediate pressure appears tied to Applied Materials’ Investor Day. Commentary suggested that its 2030 financial targets were less ambitious or less specific than bullish investors expected, raising concerns that future growth and margin expansion may not justify the stock’s premium valuation. Why Applied Materials Sank Today
• Negative Sentiment: AMAT has also been affected by a broad selloff in semiconductor stocks and a six-session losing streak, amplifying the reaction to the Investor Day outlook. The stock is trading well below its 50-day and 200-day moving averages, adding technical pressure.

Analyst Ratings Changes

Several research analysts recently weighed in on AMAT shares. Needham & Company LLC reiterated a "buy" rating and issued a $740.00 price objective on shares of Applied Materials in a research report on Friday, August 14th. Mizuho reduced their target price on shares of Applied Materials from $650.00 to $590.00 and set an "outperform" rating on the stock in a report on Tuesday, August 25th. Zacks Research raised Applied Materials from a "hold" rating to a "strong-buy" rating in a research report on Wednesday, July 1st. Weiss Ratings lowered Applied Materials from a "buy (b)" rating to a "buy (b-)" rating in a report on Wednesday, September 9th. Finally, Susquehanna raised their price objective on shares of Applied Materials from $575.00 to $900.00 and gave the stock a "positive" rating in a report on Tuesday, June 30th. One investment analyst has rated the stock with a Strong Buy rating, thirty have given a Buy rating and eight have issued a Hold rating to the company's stock. Based on data from MarketBeat, the company has a consensus rating of "Moderate Buy" and a consensus target price of $637.14.

Applied Materials Stock Performance

The company has a market cap of $341.26 billion, a PE ratio of 37.07, a P/E/G ratio of 1.29 and a beta of 1.60. The stock's 50-day simple moving average is $485.07 and its 200 day simple moving average is $484.96. The company has a debt-to-equity ratio of 0.20, a quick ratio of 1.79 and a current ratio of 2.42.

Applied Materials (NASDAQ:AMAT - Get Free Report) last announced 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 for the quarter, compared to analyst estimates of $8.99 billion. Applied Materials had a return on equity of 38.02% and a net margin of 30.05%. The firm's revenue for the quarter was up 24.8% compared to the same quarter last year. During the same quarter in the previous year, the company earned $2.48 EPS. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. As a group, equities analysts anticipate that Applied Materials, Inc. will post 12.79 EPS for the current 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. The ex-dividend date of this dividend is Thursday, November 19th. This represents a $2.12 annualized dividend and a yield of 0.5%. Applied Materials's payout ratio is currently 18.28%.

Insiders Place Their Bets

In other Applied Materials news, CFO Brice Hill sold 7,500 shares of the company's stock in a transaction on Tuesday, August 25th. The stock was sold at an average price of $479.25, for a total value of $3,594,375.00. Following the sale, 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 transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Judy Bruner sold 1,000 shares of Applied Materials stock in a transaction on Tuesday, September 8th. The stock was sold at an average price of $465.00, for a total value of $465,000.00. Following the transaction, the director directly owned 25,544 shares of the company's stock, valued at $11,877,960. This trade represents a 3.77% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have sold 9,225 shares of company stock worth $4,454,181. 0.30% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Applied Materials

Institutional investors have recently modified their holdings of the company. JFS Wealth Advisors LLC raised its holdings in shares of Applied Materials by 4.3% during the 2nd quarter. JFS Wealth Advisors LLC now owns 409 shares of the manufacturing equipment provider's stock valued at $296,000 after buying an additional 17 shares during the period. Innovative Asset Advisors Group LLC lifted its position in Applied Materials by 2.1% during the 2nd quarter. Innovative Asset Advisors Group LLC now owns 961 shares of the manufacturing equipment provider's stock worth $695,000 after acquiring an additional 20 shares in the last quarter. Stonebridge Financial Group LLC boosted its holdings in Applied Materials by 2.1% in the 2nd quarter. Stonebridge Financial Group LLC now owns 1,003 shares of the manufacturing equipment provider's stock worth $725,000 after acquiring an additional 21 shares during the period. N.E.W. Advisory Services LLC boosted its holdings in Applied Materials by 5.9% in the 2nd quarter. N.E.W. Advisory Services LLC now owns 377 shares of the manufacturing equipment provider's stock worth $273,000 after acquiring an additional 21 shares during the period. Finally, IMG Wealth Management Inc. boosted its holdings in Applied Materials by 13.0% in the 2nd quarter. IMG Wealth Management Inc. now owns 183 shares of the manufacturing equipment provider's stock worth $132,000 after acquiring an additional 21 shares during the period. Institutional investors and hedge funds own 80.56% of the company's stock.

About Applied Materials

Applied Materials, Inc is a global supplier of equipment, services and software used to manufacture semiconductor chips, flat-panel displays and other advanced electronic products. Its technologies help customers build and enhance materials at the nanoscale, supporting processes such as deposition, etching, inspection, metrology and packaging.

The company's offerings include semiconductor manufacturing systems, process-control and inspection equipment, and services designed to improve the performance, productivity and longevity of production equipment.

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