Applied Materials (NASDAQ:AMAT) Stock Jumps 3.5% - Should You Buy?

Key Points

• Applied Materials shares rose 3.5% to $529.30, supported by improving technical momentum and optimism around AI-related semiconductor and packaging demand.
• Applied is expanding its $5 billion EPIC Center partnership with BE Semiconductor into 3D chip assembly, advanced bonding, panel-scale packaging and photonics, while memory demand and its KIOXIA collaboration could extend growth.
• Analysts maintain a broadly positive view, with a “Moderate Buy” consensus and $629.38 average target, although the stock’s elevated valuation and concerns that record tool sales may not be sustainable present risks after the rally.

Shares of Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) were up 3.5% during mid-day trading on Thursday. The stock traded as high as $533.88 and last traded at $529.30. Approximately 6,046,453 shares traded hands during mid-day trading, a decline of 24% from the average daily volume of 7,955,545 shares. The stock had previously closed at $511.38.

Applied Materials News Summary

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

• Positive Sentiment: Expanded AI packaging partnership: BE Semiconductor Industries (Besi) will join Applied Materials’ $5 billion EPIC Center as an innovation partner. The collaboration will expand beyond hybrid bonding into 3D integrated-circuit assembly, thermo-compression bonding, panel-scale packaging, and photonics—markets that could benefit from rising AI infrastructure spending. Applied Materials and Besi Expand Strategic Partnership
• Positive Sentiment: Memory demand supports the growth outlook: Investor commentary cited AI-compute expansion and memory shortages as drivers that could extend AMAT’s growth runway. Applied’s partnership with KIOXIA also targets denser memory structures, multi-chip stacking, and advanced materials for AI-focused devices. AI Compute Expansion and Memory Shortages Extend Applied Materials’ Growth Runway
• Positive Sentiment: Improving technical momentum: AMAT recently moved above its 50-day moving average, a signal that technical investors may interpret as confirmation of a renewed short-term uptrend. Applied Materials Recently Broke Out Above the 50-Day Moving Average
• Neutral Sentiment: Valuation remains a consideration: Analysts view Applied Materials as offering broad AI-related exposure at a lower valuation than some semiconductor-equipment peers, though the stock’s strong performance has increased expectations for continued execution.
• Negative Sentiment: Some caution after the rally: One analyst trimmed the price target despite forecasting higher 2027 sales and profit, while commentary warned that record tool sales may not represent a sustainable new normal. These factors could limit near-term upside if semiconductor spending slows.

Analyst Upgrades and Downgrades

AMAT has been the topic of several recent research reports. KeyCorp raised their target price on Applied Materials from $550.00 to $750.00 and gave the company an "overweight" rating in a report on Monday, June 29th. Susquehanna boosted their target price on Applied Materials from $575.00 to $900.00 and gave the stock a "positive" rating in a report on Tuesday, June 30th. B. Riley Financial reiterated a "buy" rating and set a $700.00 price target (down from $790.00) on shares of Applied Materials in a report on Friday, August 14th. JPMorgan Chase & Co. boosted their price objective on shares of Applied Materials from $515.00 to $660.00 and gave the stock an "overweight" rating in a research note on Friday, August 14th. Finally, HSBC lowered 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. One equities research analyst has rated the stock with a Strong Buy rating, thirty have issued a Buy rating and eight have given a Hold rating to the company. Based on data from MarketBeat, Applied Materials has a consensus rating of "Moderate Buy" and a consensus target price of $629.38.

Applied Materials Stock Performance

The firm's 50 day moving average price is $486.07 and its 200-day moving average price is $474.12. The firm has a market cap of $420.05 billion, a price-to-earnings ratio of 45.63, a P/E/G ratio of 1.42 and a beta of 1.60. The company has a debt-to-equity ratio of 0.20, a current ratio of 2.42 and a quick ratio of 1.79.

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, beating 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 the consensus estimate of $8.99 billion. During the same period in the prior year, the firm 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. On average, analysts anticipate that Applied Materials, Inc. will post 12.79 earnings per share for the current year.

Applied Materials Dividend Announcement

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

Insiders Place Their Bets

In related news, Director Judy Bruner sold 1,000 shares of the firm's stock in a transaction on Tuesday, September 8th. The stock was sold at an average price of $465.00, for a total value of $465,000.00. Following the completion of 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 sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, CFO Brice Hill sold 7,500 shares of the stock in a transaction on Tuesday, August 25th. The shares were sold at an average price of $479.25, for a total transaction of $3,594,375.00. Following the completion of the transaction, the chief financial officer owned 128,613 shares of the company's stock, valued at approximately $61,637,780.25. This represents a 5.51% decrease in their position. The SEC filing for this sale provides additional information. Corporate insiders own 0.30% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the stock. Ausdal Financial Partners Inc. bought a new stake in Applied Materials in the 2nd quarter valued at $4,005,000. Caldwell Investment Management Ltd. bought a new position in Applied Materials during the 2nd quarter worth about $1,589,000. Evolve Private Wealth LLC raised its stake in shares of Applied Materials by 59.0% in the 1st quarter. Evolve Private Wealth LLC now owns 2,875 shares of the manufacturing equipment provider's stock valued at $983,000 after purchasing an additional 1,067 shares during the period. Principal Financial Group Inc. lifted its holdings in shares of Applied Materials by 3.0% in the second quarter. Principal Financial Group Inc. now owns 1,008,591 shares of the manufacturing equipment provider's stock valued at $729,211,000 after purchasing an additional 28,982 shares in the last quarter. Finally, Handelsbanken Fonder AB boosted its position in shares of Applied Materials by 29.6% during the second quarter. Handelsbanken Fonder AB now owns 462,685 shares of the manufacturing equipment provider's stock worth $334,521,000 after buying an additional 105,776 shares during the period. 80.56% of the stock is currently owned by institutional investors and hedge funds.

About Applied Materials

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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