Applied Materials (NASDAQ:AMAT) Stock Jumps 1.4% - Here's Why

Key Points

• Applied Materials shares rose 1.4% to $421.66, fueled by expectations that persistent memory shortages through 2030 could drive extended semiconductor-fabrication equipment demand.
• AI-related chip spending, positive analyst sentiment and institutional buying are supporting the long-term growth outlook; analysts have a consensus “Moderate Buy” rating and a $632.70 price target.
• Investors are awaiting upcoming earnings and guidance, while technical weakness, China exposure, supply-chain risks and a relatively high P/E ratio remain concerns.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) rose 1.4% during trading on Thursday. The company traded as high as $426.52 and last traded at $421.66. 6,599,820 shares were traded during mid-day trading, a decline of 16% from the average session volume of 7,868,716 shares. The stock had previously closed at $416.00.

Applied Materials News Summary

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

• Positive Sentiment: Memory shortage points to extended equipment demand. SK Hynix’s expectation that memory shortages could persist into 2030 implies years of additional fab construction and spending on wafer-fabrication equipment. This helped lift Applied Materials and other chip-equipment stocks in a recent semiconductor rally. Chip Equipment Stocks Rally as SK Hynix Signals Memory Shortage Into 2030
• Positive Sentiment: AI spending supports the long-term growth thesis. Investors are highlighting Applied Materials as an AI-related semiconductor hardware beneficiary, with demand spanning chip designers, manufacturers and equipment suppliers. The company is also described as a potentially undervalued, high-quality AI leader, while its valuation remains below the 43-times earnings threshold used in one AI-chip stock screen. Top 3 AI Chip Stocks With P E Under 43
• Positive Sentiment: Analyst sentiment and institutional demand are supportive. Wall Street analysts remain broadly optimistic, and 36 exchange-traded funds added AMAT shares on October 26, potentially providing incremental buying support. Is Applied Materials a Buy as Wall Street Analysts Look Optimistic?
• Neutral Sentiment: Investors are positioning ahead of earnings. Analysts expect a robust double-digit earnings increase in the upcoming fourth-quarter report, driven by AI-related chip demand. The results and forward guidance will be the next major catalyst. What You Need to Know Ahead of Applied Materials’ Earnings Release
• Negative Sentiment: Recent technical weakness and uncertainty temper the outlook. AMAT’s recent decline leaves it below key moving averages, and investors are assessing whether the company’s long-term growth profile still matches the investment thesis. The stock also faces potential sensitivity to supply bottlenecks, China exposure and a relatively high trailing P/E of 36.35. Is Applied Materials Still The Company You Bought?

Wall Street Analyst Weigh In

A number of equities analysts have issued reports on the stock. Berenberg Bank lifted their target price on shares of Applied Materials from $575.00 to $675.00 and gave the stock a "buy" rating in a research report on Monday, August 17th. Needham & Company LLC lowered their price target on shares of Applied Materials from $740.00 to $580.00 and set a "buy" rating on the stock in a research report on Friday, October 16th. William Blair initiated coverage on shares of Applied Materials in a research note on Tuesday, August 11th. They set a "market perform" rating for the company. Seaport Research Partners restated a "buy" rating and set a $575.00 price objective (up from $500.00) on shares of Applied Materials in a research report on Friday, August 14th. Finally, Erste Group Bank downgraded Applied Materials from a "buy" rating to a "hold" rating in a research report on Wednesday, August 5th. Thirty equities research analysts have rated the stock with a Buy rating and nine have given a Hold rating to the company. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus price target of $632.70.

Applied Materials Price Performance

The company has a market capitalization of $334.63 billion, a price-to-earnings ratio of 36.35, a PEG ratio of 1.05 and a beta of 1.60. 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 simple moving average is $461.27 and its 200-day simple moving average is $442.61.

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 (EPS) for the quarter, beating the consensus estimate of $3.40 by $0.10. Applied Materials had a net margin of 30.05% and a return on equity of 38.02%. The business had revenue of $9.12 billion for the quarter, compared to the consensus estimate of $8.99 billion. During the same quarter in the prior year, the firm posted $2.48 earnings per share. The company's quarterly revenue was up 24.8% compared to the same quarter last year. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. On average, equities research analysts predict that Applied Materials, Inc. will post 12.79 earnings per share for the current fiscal year.

Applied Materials Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, December 10th. Investors of record on Thursday, November 19th will be paid a $0.53 dividend. This represents a $2.12 annualized dividend and a yield of 0.5%. The ex-dividend date is Thursday, November 19th. Applied Materials's dividend payout ratio is presently 18.28%.

Insider Buying and Selling

In related news, CAO Adam Sanders sold 725 shares of the 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 directly owned 3,181 shares in the company, valued at approximately $1,732,245.36. This represents a 18.56% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Brice Hill sold 7,500 shares of the firm's stock in a transaction dated 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 sale, the chief financial officer directly 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. 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 company insiders.

Institutional Investors Weigh In On Applied Materials

A number of institutional investors have recently bought and sold shares of the stock. BlackRock Inc. increased its holdings in shares of Applied Materials by 1.6% during the 2nd quarter. BlackRock Inc. now owns 80,212,518 shares of the manufacturing equipment provider's stock worth $57,993,650,000 after buying an additional 1,237,685 shares during the last quarter. State Street Corp grew its position in Applied Materials by 85.4% during the second 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 increased its stake in 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 last quarter. Van ECK Associates Corp raised its holdings in shares of Applied Materials by 16.2% in the 2nd quarter. Van ECK Associates Corp now owns 7,713,599 shares of the manufacturing equipment provider's stock worth $5,576,932,000 after purchasing an additional 1,073,879 shares during the period. Finally, Bank of America Corp DE purchased a new position in shares of Applied Materials in the 2nd quarter worth about $5,252,863,000. 80.56% of the stock is currently owned by hedge funds and other institutional investors.

Applied Materials Company Profile

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.

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