Applied Materials (NASDAQ:AMAT) Stock Jumps 11.4% - Still a Buy?

Key Points

• Applied Materials shares surged 11.4% to $370.55 on Monday, with trading volume 38% above its daily average, as chip-equipment stocks rebounded ahead of earnings after a sharp prior-week sell-off.
• Potential supports include AI-related chip-equipment demand, advanced packaging growth and higher memory investment. The upcoming earnings report and 2027 outlook remain key tests amid supply concerns.
• Analyst sentiment is broadly positive, with a “Moderate Buy” consensus and average price target of $625.76, though B. Riley cut its target to $475 and valuation concerns could leave the stock vulnerable if growth disappoints.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report)'s share price was up 11.4% during trading on Monday. The company traded as high as $375.53 and last traded at $370.55. Approximately 10,937,969 shares were traded during mid-day trading, an increase of 38% from the average daily volume of 7,934,396 shares. The stock had previously closed at $332.71.

Key Headlines Impacting Applied Materials

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

• Positive Sentiment: Chip-equipment stocks rallied broadly, with Applied Materials among the leaders. The rebound comes ahead of earnings and follows a sharp sell-off in the shares last week, suggesting improved sentiment toward the sector. Applied Materials Jumps Ahead of Earnings
• Positive Sentiment: Recent coverage points to AI-driven chip-equipment demand, growth in advanced packaging and increased memory investment as potential supports for AMAT’s business and upcoming results. AMAT to Post Q4 Earnings
• Neutral Sentiment: B. Riley lowered its price target from $700 to $475 but maintained a Buy rating; the revised target still implies potential upside, though the cut signals a more cautious valuation view. B. Riley analyst recommendations
• Negative Sentiment: Investors face a key test in the coming earnings report: supply concerns and expectations for the company’s 2027 outlook could limit the rally if results or guidance disappoint. Applied Materials Heads into Q4 Earnings Amid Supply Worries
• Negative Sentiment: Another valuation analysis argues that the stock may be above fair value after substantial longer-term gains, leaving less room for error if future cash flows or growth fall short of investor expectations. Applied Materials Stock Looks Above Fair Value

Analyst Upgrades and Downgrades

Several research analysts have issued reports on the company. Evercore set a $590.00 price target on Applied Materials in a report on Thursday, October 15th. Weiss Ratings downgraded Applied Materials from a "buy (b)" rating to a "buy (b-)" rating in a report on Wednesday, September 9th. Craig Hallum upped their target price on Applied Materials from $530.00 to $585.00 and gave the stock a "buy" rating in a research report on Friday, August 14th. Bank of America cut their target price on Applied Materials from $720.00 to $650.00 and set a "buy" rating on the stock in a report on Friday, August 14th. Finally, UBS Group increased their target price on Applied Materials from $675.00 to $695.00 and gave the stock a "buy" rating in a report on Tuesday, September 1st. Thirty investment analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the company. According to data from MarketBeat, Applied Materials presently has a consensus rating of "Moderate Buy" and an average target price of $625.76.

Applied Materials Stock Performance

The firm has a market cap of $294.07 billion, a P/E ratio of 31.94, a PEG ratio of 0.65 and a beta of 1.67. 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 company's 50-day moving average is $444.84 and its two-hundred day moving average is $444.66.

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. The business had revenue of $9.12 billion during the quarter, compared to the consensus estimate of $8.99 billion. Applied Materials had a return on equity of 38.02% and a net margin of 30.05%. The company's quarterly revenue was up 24.8% on a year-over-year basis. During the same quarter in the previous year, the business earned $2.48 EPS. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. As a group, equities analysts predict that Applied Materials, Inc. will post 12.79 EPS for the current fiscal year.

Applied Materials Dividend Announcement

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 issued a $0.53 dividend. The ex-dividend date is Thursday, November 19th. This represents a $2.12 annualized dividend and a dividend yield of 0.6%. Applied Materials's dividend payout ratio is currently 18.28%.

Insider Activity at Applied Materials

In related news, Director Judy Bruner sold 1,000 shares of the firm's 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 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 ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CAO Adam Sanders sold 725 shares of the business's stock in a transaction dated Friday, October 2nd. The stock was sold at an average price of $544.56, for a total transaction of $394,806.00. Following the transaction, the chief accounting officer owned 3,181 shares in the company, valued at approximately $1,732,245.36. This trade represents a 18.56% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 9,225 shares of company stock valued at $4,454,181 over the last ninety days. Corporate insiders own 0.30% of the company's stock.

Hedge Funds Weigh In On Applied Materials

A number of hedge funds and other institutional investors have recently modified their holdings of the business. Harborfront Financial Group LLC bought a new position in Applied Materials during the second quarter valued at about $27,000. Curry Webb Wealth Management LLC bought a new stake in Applied Materials in the third quarter worth about $30,000. Dakota Community Bank & Trust NA bought a new stake in Applied Materials in the third quarter worth about $31,000. Orion Capital Management LLC purchased a new position in Applied Materials in the second quarter valued at about $33,000. Finally, Highland Investment Advisors LLC purchased a new position in Applied Materials in the second quarter valued at about $33,000. Hedge funds and other institutional investors own 80.56% of the company's stock.

About Applied Materials

Applied Materials, Inc develops and supplies equipment, software and services used to manufacture semiconductors and advanced displays. Its technologies help customers build and process materials at the microscopic scale required for chips and other electronic products.

The company's offerings include systems for depositing, removing and modifying materials, as well as inspection, measurement and process-control tools. It also provides equipment and services for advanced semiconductor packaging and supports customers with maintenance, upgrades and manufacturing software.

Founded in 1967 and headquartered in Santa Clara, California, Applied Materials serves semiconductor and display manufacturers around the world.

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