Applied Materials (NASDAQ:AMAT) Trading 4.3% Higher - Should You Buy?

Key Points

• Applied Materials shares rose 4.3% to $454.71, supported by strong AI- and memory-related semiconductor demand and expectations for increased global fab investment, advanced packaging, DRAM and HBM capacity.
• Analysts remain broadly bullish: the stock has a “Moderate Buy” consensus rating, with an average price target of $658.45 and several firms recently raising their targets. The company also exceeded quarterly estimates, reporting $3.50 EPS and $9.12 billion in revenue, up 24.8% year over year.
• Investors should weigh the bullish outlook against valuation and cyclical risks: shares trade at about 39 times earnings after a substantial multiyear gain, while potential memory-capacity constraints could delay semiconductor-equipment demand. Insiders have also sold more than $146 million of stock over the past quarter.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) shares rose 4.3% during trading on Friday . The stock traded as high as $460.20 and last traded at $454.71. Approximately 5,983,282 shares were traded during mid-day trading, a decline of 26% from the average daily volume of 8,129,665 shares. The stock had previously closed at $435.91.

Key Stories Impacting Applied Materials

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

• Positive Sentiment: AI-related and memory stocks were among the market’s strongest performers, providing a favorable backdrop for Applied Materials as semiconductor manufacturers expand capacity to meet AI demand. Memory, Other AI-Related Stocks Lead the Market's Top Performers Friday
• Positive Sentiment: Analysts continue to raise expectations for Applied Materials. One report highlighted that management increased its forecast twice between February and August, helping explain the stock’s significant rerating despite trailing revenue growth of 7.8%. Why Did Applied Materials Stock Nearly Triple On Single-Digit Trailing Revenue Growth?
• Positive Sentiment: Rising global fab investments and AI-led demand for advanced packaging, DRAM and HBM are expected to support Applied Materials’ wafer-fabrication-equipment business and sustain momentum if semiconductor spending remains strong. AMAT Rides on AI-Led WFE Demand: Can it Sustain the Momentum?
• Positive Sentiment: UBS projected strong potential appreciation for AMAT, while another analyst raised the fiscal 2027 earnings-per-share estimate, reinforcing the bullish outlook. UBS Group Forecasts Strong Price Appreciation for Applied Materials Stock FY2027 EPS Estimate for Applied Materials Boosted by Analyst
• Neutral Sentiment: Although the stock has delivered exceptional long-term gains, investors are reassessing whether its valuation still leaves meaningful upside after the recent pullback and sharp multiyear run. Can Applied Materials Still Look Cheap After A 237% Run?
• Negative Sentiment: Industry optimism includes a caution that future memory-capacity constraints could create risks for parts of the semiconductor cycle, potentially limiting or delaying equipment-demand growth. SEMI's CEO Has Watched Four Decades of Chip Cycles

Analyst Ratings Changes

A number of research firms have issued reports on AMAT. KeyCorp increased their target price on Applied Materials from $550.00 to $750.00 and gave the stock an "overweight" rating in a report on Monday, June 29th. JPMorgan Chase & Co. upped their price objective on Applied Materials from $515.00 to $660.00 and gave the stock an "overweight" rating in a research report on Friday, August 14th. HC Wainwright set a $850.00 price objective on Applied Materials in a report on Monday, June 29th. Seaport Research Partners reissued a "buy" rating and issued a $575.00 target price on shares of Applied Materials in a research report on Friday, August 14th. Finally, Wells Fargo & Company boosted their target price on Applied Materials from $715.00 to $740.00 and gave the company an "overweight" rating in a research note on Friday, June 26th. One analyst has rated the stock with a Strong Buy rating, twenty-seven have issued a Buy rating and five have issued a Hold rating to the company. According to MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average target price of $658.45.

Applied Materials Stock Up 4.3%

The firm has a 50-day moving average of $536.69 and a 200 day moving average of $460.63. 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 $360.86 billion, a price-to-earnings ratio of 39.20, a PEG ratio of 1.22 and a beta of 1.60.

Applied Materials (NASDAQ:AMAT - Get Free Report) last posted its quarterly earnings results on Thursday, August 13th. The manufacturing equipment provider reported $3.50 earnings per share for the quarter, topping the consensus estimate of $3.40 by $0.10. Applied Materials had a return on equity of 38.02% and a net margin of 30.05%.The firm had revenue of $9.12 billion for the quarter, compared to analyst estimates of $8.99 billion. During the same quarter in the previous year, the firm earned $2.48 EPS. The business'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. As a group, sell-side analysts forecast that Applied Materials, Inc. will post 12.76 earnings per share for the current fiscal year.

Applied Materials Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be paid a $0.53 dividend. The ex-dividend date is Thursday, August 20th. This represents a $2.12 dividend on an annualized basis and a yield of 0.5%. Applied Materials's dividend payout ratio (DPR) is currently 18.28%.

Insider Buying and Selling

In related news, Director Thomas Iannotti sold 9,250 shares of the firm's stock in a transaction dated Tuesday, June 16th. The shares were sold at an average price of $599.77, for a total value of $5,547,872.50. Following the completion of the sale, the director directly owned 40,559 shares in the company, valued at approximately $24,326,071.43. This trade represents a 18.57% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, insider Prabu Raja sold 10,000 shares of the business's stock in a transaction that occurred on Thursday, June 18th. The stock was sold at an average price of $633.53, for a total value of $6,335,300.00. Following the transaction, the insider directly owned 346,642 shares in the company, valued at approximately $219,608,106.26. This trade represents a 2.80% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 231,692 shares of company stock worth $146,114,059. Corporate insiders own 0.30% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors have recently made changes to their positions in AMAT. Harborfront Financial Group LLC bought a new position in shares of Applied Materials in the second quarter valued at about $27,000. Orion Capital Management LLC acquired a new position in Applied Materials in the 2nd quarter valued at about $33,000. Highland Investment Advisors LLC acquired a new position in Applied Materials in the 2nd quarter valued at about $33,000. BOK Financial Private Wealth Inc. bought a new position in Applied Materials in the 2nd quarter valued at about $41,000. Finally, Financial Freedom LLC bought a new position in Applied Materials in the 1st quarter valued at about $28,000. 80.56% of the stock is owned by institutional investors and hedge funds.

About Applied Materials

Applied Materials, Inc is a U.S.-based supplier of equipment, services and software used to manufacture semiconductor chips, flat panel displays and other advanced materials. Headquartered in Santa Clara, California, the company designs and sells capital equipment and related technologies that enable production of integrated circuits, display panels and materials used across the electronics supply chain.

Applied Materials' offerings include process equipment and factory software that support critical steps in device fabrication, such as deposition, etch, implantation, inspection and metrology, as well as systems for packaging and advanced heterogeneous integration.

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