Applied Materials (NASDAQ:AMAT) Shares Gap Up - Still a Buy?

Key Points

• Applied Materials shares jumped from a $486.76 close to a $504.71 open, with the stock last trading near $505.38.
• Analysts remain broadly bullish: the stock carries a “Moderate Buy” consensus rating and a $629.38 average price target, although Morgan Stanley cut its target to $563 and kept an “equal weight” rating.
• Recent fundamentals were strong, with quarterly revenue up 24.8% year over year to $9.12 billion and EPS of $3.50 beating estimates; the company also declared a $0.53 quarterly dividend.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) gapped up before the market opened on Tuesday. The stock had previously closed at $486.76, but opened at $504.71. Applied Materials shares last traded at $505.3820, with a volume of 1,352,669 shares.

Applied Materials News Roundup

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

• Positive Sentiment: Wall Street’s average price target implies approximately 34.2% potential upside, while positive earnings-estimate revisions suggest analysts remain constructive on Applied Materials’ revenue and profit outlook. Wall Street Analysts Believe Applied Materials Could Rally 34.23%
• Positive Sentiment: Although Morgan Stanley lowered its target, the revised $563 target remains above the stock’s recent level, indicating the firm still sees moderate upside. Applied Materials’ strong recent earnings, revenue growth, and exposure to semiconductor-equipment demand provide additional support for the bullish case. Why a Price Target Cut Isn’t All Bad News
• Neutral Sentiment: A retrospective article highlights the substantial long-term return generated by a $1,000 investment in Applied Materials a decade ago. While this reinforces the company’s historical shareholder performance, it is not a direct near-term catalyst. Applied Materials Long-Term Investment Return
• Negative Sentiment: Morgan Stanley cut its Applied Materials price target from $642 to $563 and maintained an “equal weight” rating. The reduction signals more cautious expectations for valuation or semiconductor-equipment demand, even though the new target remains higher than the recent trading level. Morgan Stanley Cuts Applied Materials Price Target

Analyst Ratings Changes

A number of research firms have issued reports on AMAT. Jefferies Financial Group increased their price target on Applied Materials from $510.00 to $770.00 and gave the stock a "buy" rating in a report on Friday, June 26th. HSBC cut 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. Sanford C. Bernstein raised their price target on shares of Applied Materials from $675.00 to $700.00 and gave the stock an "outperform" rating in a report on Friday, August 14th. Royal Bank Of Canada upped their price objective on shares of Applied Materials from $520.00 to $600.00 and gave the company an "outperform" rating in a report on Friday, August 14th. Finally, Wall Street Zen raised shares of Applied Materials from a "hold" rating to a "buy" rating in a research report on Saturday. One analyst has rated the stock with a Strong Buy rating, thirty have given a Buy rating and eight have given a Hold rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $629.38.

Applied Materials Price 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 stock has a market capitalization of $397.99 billion, a price-to-earnings ratio of 43.21, a PEG ratio of 1.35 and a beta of 1.60. The business's fifty day moving average price is $487.97 and its 200-day moving average price is $471.76.

Applied Materials (NASDAQ:AMAT - Get Free Report) last released its quarterly earnings results on Thursday, August 13th. The manufacturing equipment provider reported $3.50 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $3.40 by $0.10. Applied Materials had a return on equity of 38.02% and a net margin of 30.05%.The business had revenue of $9.12 billion during the quarter, compared to the consensus estimate of $8.99 billion. During the same quarter in the previous year, the business earned $2.48 EPS. The company's quarterly revenue was up 24.8% on a year-over-year basis. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. On average, research analysts forecast that Applied Materials, Inc. will post 12.79 EPS for the current year.

Applied Materials Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, December 10th. Stockholders of record on Thursday, November 19th will be paid a $0.53 dividend. The ex-dividend date is Thursday, November 19th. This represents a $2.12 annualized dividend and a dividend yield of 0.4%. Applied Materials's dividend payout ratio is presently 18.28%.

Insider Transactions at Applied Materials

In other news, CFO Brice Hill sold 7,500 shares of the company's stock in a transaction that occurred 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 completion of the transaction, the chief financial officer directly owned 128,613 shares of the company's stock, valued at $61,637,780.25. This represents a 5.51% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, Director Judy Bruner sold 1,000 shares of the company's stock in a transaction on Tuesday, September 8th. The shares were sold at an average price of $465.00, for a total value of $465,000.00. Following the completion of the transaction, the director owned 25,544 shares of the company's stock, valued at $11,877,960. This trade represents a 3.77% decrease in their position. The SEC filing for this sale provides additional information. 0.30% of the stock is owned by company insiders.

Institutional Trading of Applied Materials

Large investors have recently added to or reduced their stakes in the stock. JFS Wealth Advisors LLC raised its holdings in shares of Applied Materials by 4.3% in the 2nd quarter. JFS Wealth Advisors LLC now owns 409 shares of the manufacturing equipment provider's stock valued at $296,000 after acquiring an additional 17 shares in the last quarter. Innovative Asset Advisors Group LLC grew its holdings in shares of Applied Materials by 2.1% during the second quarter. Innovative Asset Advisors Group LLC now owns 961 shares of the manufacturing equipment provider's stock worth $695,000 after purchasing an additional 20 shares in the last quarter. Stonebridge Financial Group LLC increased its position in shares of Applied Materials by 2.1% in the second quarter. Stonebridge Financial Group LLC now owns 1,003 shares of the manufacturing equipment provider's stock worth $725,000 after purchasing an additional 21 shares during the last quarter. N.E.W. Advisory Services LLC increased its position in shares of Applied Materials by 5.9% in the second quarter. N.E.W. Advisory Services LLC now owns 377 shares of the manufacturing equipment provider's stock worth $273,000 after purchasing an additional 21 shares during the last quarter. Finally, IMG Wealth Management Inc. raised its stake in Applied Materials by 13.0% in the second quarter. IMG Wealth Management Inc. now owns 183 shares of the manufacturing equipment provider's stock valued at $132,000 after purchasing an additional 21 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 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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