Applied Materials (NASDAQ:AMAT) Shares Up 5.1% - Still a Buy?

Key Points

• Applied Materials shares rose 5.1% to $416 amid expectations that a potential memory-chip shortage through 2030 could drive demand for semiconductor manufacturing equipment.
• The company is expanding its advanced-packaging strategy by increasing its stake in BE Semiconductor Industries to about 20%, targeting hybrid bonding and chip-interconnect technologies used in AI and high-performance computing.
• Analysts maintain a favorable outlook, with a consensus “Moderate Buy” rating and an average price target of $632.70, though investors should monitor upcoming earnings, supply constraints and the company’s China exposure.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report)'s share price shot up 5.1% on Wednesday. The company traded as high as $421.83 and last traded at $416.00. 6,974,052 shares traded hands during mid-day trading, a decline of 11% from the average daily volume of 7,865,519 shares. The stock had previously closed at $395.93.

Applied Materials News Roundup

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

• Positive Sentiment: Long-term memory demand boosted equipment outlook. SK Hynix’s projection of a memory shortage extending into 2030 suggests semiconductor manufacturers may need to build fabs and expand production, increasing potential demand for Applied Materials’ wafer-fabrication equipment. Chip Equipment Stocks Rally as SK Hynix Signals Memory Shortage Into 2030
• Positive Sentiment: Applied Materials deepened its advanced-packaging strategy. The company agreed to increase its stake in BE Semiconductor Industries from approximately 9% to about 20%, strengthening a partnership focused on hybrid bonding and chip-interconnect technologies used in AI and high-performance computing. The move signals confidence in long-term advanced-packaging growth. Applied Materials to Increase its Strategic Investment in BE Semiconductor Industries
• Positive Sentiment: Analyst and industry views remain favorable. Bernstein issued a Buy rating, while a recent industry report identified Applied Materials as a major participant in the expanding epitaxial-wafer and chip-technology market. Growth opportunities include AI, electric vehicles, telecommunications and power electronics. Applied Materials Receives a Buy from Bernstein
• Neutral Sentiment: Investors are looking ahead to quarterly results. Analysts expect a strong double-digit increase in earnings when Applied Materials reports its fiscal fourth-quarter results next month, with AI-related chip demand expected to remain a key growth driver. The earnings release could provide a more concrete test of current expectations. What You Need to Know Ahead of Applied Materials’ Earnings Release
• Negative Sentiment: Risks remain around supply constraints and China exposure. Commentary on the equipment-sector rally cautioned that bottlenecks and Applied Materials’ exposure to China could limit the durability of the gains. The company also objected to proposed tokenized versions of its shares, adding a corporate-governance and market-structure issue for investors to monitor. Applied Materials Moved, What Is Drawing Fresh Attention?

Analysts Set New Price Targets

Several research firms recently issued reports on AMAT. The Goldman Sachs Group upped their price target on shares of Applied Materials from $645.00 to $670.00 and gave the company a "buy" rating in a report on Friday, August 14th. Berenberg Bank increased their target price on shares of Applied Materials from $575.00 to $675.00 and gave the company a "buy" rating in a research report on Monday, August 17th. Citigroup reaffirmed a "buy" rating and set a $710.00 target price (up from $550.00) on shares of Applied Materials in a research note on Monday, August 3rd. Weiss Ratings cut shares of Applied Materials from a "buy (b)" rating to a "buy (b-)" rating in a research report on Wednesday, September 9th. Finally, William Blair began coverage on shares of Applied Materials in a research report on Tuesday, August 11th. They issued a "market perform" rating on the stock. Thirty analysts have rated the stock with a Buy rating and nine have given a Hold rating to the company's stock. Based on data from MarketBeat.com, Applied Materials presently has a consensus rating of "Moderate Buy" and an average price target of $632.70.

Applied Materials Stock Performance

The firm has a market cap of $330.14 billion, a price-to-earnings ratio of 35.86, a price-to-earnings-growth ratio of 1.05 and a beta of 1.60. The company has a debt-to-equity ratio of 0.20, a quick ratio of 1.79 and a current ratio of 2.42. The firm's 50 day moving average is $463.24 and its 200-day moving average is $441.94.

Applied Materials (NASDAQ:AMAT - Get Free Report) last released its 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. Applied Materials had a net margin of 30.05% and a return on equity of 38.02%. The firm had revenue of $9.12 billion during the quarter, compared to analyst estimates of $8.99 billion. During the same quarter in the previous year, the business earned $2.48 EPS. The business's 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. 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 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. This represents a $2.12 annualized dividend and a dividend yield of 0.5%. The ex-dividend date is Thursday, November 19th. Applied Materials's payout ratio is currently 18.28%.

Insider Buying and Selling at Applied Materials

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

Institutional Trading of Applied Materials

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

About Applied Materials

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.