Applied Materials (NASDAQ:AMAT) Shares Gap Up - Here's Why

Key Points

• Applied Materials shares jumped, opening at $452.50 versus a prior close of $435.91 and later trading near $459.04.
• Analyst sentiment remains favorable, with a consensus “Moderate Buy” rating and an average price target of $658.45, despite one downgrade to “Hold.”
• The company exceeded quarterly earnings and revenue expectations, reporting $3.50 in EPS and $9.12 billion in revenue, while year-over-year revenue increased 24.8%.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report)'s share price gapped up prior to trading on Friday . The stock had previously closed at $435.91, but opened at $452.50. Applied Materials shares last traded at $459.0370, with a volume of 993,502 shares.

Analyst Upgrades and Downgrades

AMAT has been the subject of a number of research analyst reports. Sanford C. Bernstein upped their price target on shares of 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 reaffirmed 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. Needham & Company LLC reiterated a "buy" rating and issued a $740.00 target price on shares of Applied Materials in a report on Friday, August 14th. The Goldman Sachs Group reissued a "buy" rating and set a $645.00 target price on shares of Applied Materials in a research note on Monday, August 3rd. Finally, Erste Group Bank cut shares of Applied Materials from a "buy" rating to a "hold" rating in a report on Wednesday, August 5th. One research analyst has rated the stock with a Strong Buy rating, twenty-seven have assigned a Buy rating and five have assigned a Hold rating to the company's stock. Based on data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and a consensus target price of $658.45.

Applied Materials Stock Performance

The company has a debt-to-equity ratio of 0.20, a current ratio of 2.42 and a quick ratio of 1.79. The firm has a market capitalization of $360.04 billion, a PE ratio of 39.13, a P/E/G ratio of 1.22 and a beta of 1.60. The firm has a fifty day moving average price of $536.69 and a 200 day moving average price of $460.63.

Applied Materials (NASDAQ:AMAT - Get Free Report) last issued its quarterly earnings results on Thursday, August 13th. The manufacturing equipment provider reported $3.50 earnings per share for the quarter, topping analysts' consensus estimates of $3.40 by $0.10. The firm had revenue of $9.12 billion for the quarter, compared to analysts' expectations of $8.99 billion. Applied Materials had a return on equity of 38.02% and a net margin of 30.05%.Applied Materials's revenue was up 24.8% on a year-over-year basis. During the same quarter last year, the business posted $2.48 EPS. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. Research analysts anticipate that Applied Materials, Inc. will post 12.76 earnings per share for the current fiscal year.

Applied Materials Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be given a $0.53 dividend. This represents a $2.12 annualized dividend and a dividend yield of 0.5%. The ex-dividend date of this dividend is Thursday, August 20th. Applied Materials's dividend payout ratio (DPR) is 18.28%.

Insider Buying and Selling at Applied Materials

In other Applied Materials news, insider Prabu 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 transaction, the insider directly owned 346,642 shares in the company, valued at approximately $219,608,106.26. The trade was a 2.80% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CFO Brice Hill sold 7,500 shares of Applied Materials stock in a transaction that occurred on Tuesday, August 25th. The stock was sold at an average price of $479.25, for a total transaction of $3,594,375.00. Following the transaction, the chief financial officer owned 128,613 shares in the company, valued at approximately $61,637,780.25. The trade was a 5.51% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 231,692 shares of company stock valued at $146,114,059 over the last three months. 0.30% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of the business. Brighton Jones LLC lifted its position in shares of Applied Materials by 28.0% in the fourth quarter. Brighton Jones LLC now owns 12,674 shares of the manufacturing equipment provider's stock worth $2,061,000 after purchasing an additional 2,771 shares in the last quarter. Sivia Capital Partners LLC grew its position in Applied Materials by 26.7% during the second quarter. Sivia Capital Partners LLC now owns 3,225 shares of the manufacturing equipment provider's stock valued at $590,000 after purchasing an additional 679 shares in the last quarter. Forefront Wealth Partners LLC acquired a new position in Applied Materials in the 2nd quarter valued at approximately $410,000. Schnieders Capital Management LLC. increased its stake in Applied Materials by 30.1% in the 2nd quarter. Schnieders Capital Management LLC. now owns 15,003 shares of the manufacturing equipment provider's stock valued at $2,747,000 after buying an additional 3,469 shares during the period. Finally, Sei Investments Co. lifted its position in Applied Materials by 59.3% in the 2nd quarter. Sei Investments Co. now owns 422,694 shares of the manufacturing equipment provider's stock worth $77,383,000 after buying an additional 157,426 shares in the last quarter. Hedge funds and other institutional investors own 80.56% of the company's stock.

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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