Applied Materials (NASDAQ:AMAT) Trading Down 7.1% - Here's Why

Key Points

• Applied Materials shares fell 7.1% to about $424.21 in midday trading, dropping below both the 50-day and 200-day moving averages.
• Despite the decline, analysts remain broadly positive, with a consensus “Moderate Buy” rating and an average price target of $658.45; several firms recently raised their targets.
• The company recently exceeded quarterly earnings and revenue expectations, reporting $3.50 in EPS and $9.12 billion in revenue, while revenue grew 24.8% year over year.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) traded down 7.1% during mid-day trading on Monday . The company traded as low as $419.60 and last traded at $424.21. 7,887,686 shares traded hands during trading, a decline of 2% from the average session volume of 8,053,704 shares. The stock had previously closed at $456.49.

Analyst Ratings Changes

A number of analysts have recently commented on the stock. Erste Group Bank lowered shares of Applied Materials from a "buy" rating to a "hold" rating in a research note on Wednesday, August 5th. JPMorgan Chase & Co. increased their price objective on shares of Applied Materials from $515.00 to $660.00 and gave the company an "overweight" rating in a research report on Friday, August 14th. Jefferies Financial Group raised their target price on shares of Applied Materials from $510.00 to $770.00 and gave the stock a "buy" rating in a report on Friday, June 26th. UBS Group lifted their target price on shares of Applied Materials from $675.00 to $695.00 and gave the stock a "buy" rating in a research report on Tuesday, September 1st. Finally, Deutsche Bank Aktiengesellschaft reiterated a "buy" rating and set a $605.00 target price on shares of Applied Materials in a research note on Friday, August 14th. One investment analyst has rated the stock with a Strong Buy rating, twenty-seven have given a Buy rating and five have issued a Hold rating to the company. Based on data from MarketBeat.com, Applied Materials currently has an average rating of "Moderate Buy" and a consensus price target of $658.45.

Applied Materials Stock Performance

The business's fifty day moving average is $513.89 and its 200-day moving average is $464.57. The company has a quick ratio of 1.79, a current ratio of 2.42 and a debt-to-equity ratio of 0.20. The company has a market cap of $336.65 billion, a PE ratio of 36.57, a P/E/G ratio of 1.27 and a beta of 1.60.

Applied Materials (NASDAQ:AMAT - Get Free Report) last announced its earnings results on Thursday, August 13th. The manufacturing equipment provider reported $3.50 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 analysts' expectations of $8.99 billion. Applied Materials had a net margin of 30.05% and a return on equity of 38.02%. The firm's revenue was up 24.8% on a year-over-year basis. During the same period in the prior year, the company earned $2.48 earnings per share. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. As a group, research analysts predict that Applied Materials, Inc. will post 12.76 EPS for the current fiscal year.

Applied Materials Announces Dividend

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

Insider Activity at Applied Materials

In other news, 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 transaction, the chief financial officer owned 128,613 shares of the company's stock, valued at $61,637,780.25. This trade represents a 5.51% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, SVP Omkaram Nalamasu sold 24,263 shares of the business's stock in a transaction that occurred on Tuesday, June 16th. The shares were sold at an average price of $593.43, for a total value of $14,398,392.09. Following the transaction, the senior vice president owned 146,916 shares of the company's stock, valued at approximately $87,184,361.88. This trade represents a 14.17% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 202,061 shares of company stock valued at $128,478,941 in the last ninety days. Corporate insiders own 0.30% of the company's stock.

Hedge Funds Weigh In On Applied Materials

Several large investors have recently added to or reduced their stakes in AMAT. JFS Wealth Advisors LLC grew its position in shares of Applied Materials by 4.3% in the 2nd quarter. JFS Wealth Advisors LLC now owns 409 shares of the manufacturing equipment provider's stock worth $296,000 after buying an additional 17 shares during the last quarter. Innovative Asset Advisors Group LLC grew its holdings in shares of Applied Materials by 2.1% during the second quarter. Innovative Asset Advisors Group LLC now owns 961 shares of the manufacturing equipment provider's stock valued at $695,000 after buying an additional 20 shares during the last quarter. Stonebridge Financial Group LLC grew its stake in Applied Materials by 2.1% during the 2nd quarter. Stonebridge Financial Group LLC now owns 1,003 shares of the manufacturing equipment provider's stock valued at $725,000 after purchasing an additional 21 shares during the last quarter. N.E.W. Advisory Services LLC boosted its position in Applied Materials by 5.9% in the second quarter. N.E.W. Advisory Services LLC now owns 377 shares of the manufacturing equipment provider's stock valued at $273,000 after buying an additional 21 shares during the last quarter. Finally, IMG Wealth Management Inc. boosted its holdings in shares of Applied Materials by 13.0% in the 2nd quarter. IMG Wealth Management Inc. now owns 183 shares of the manufacturing equipment provider's stock valued at $132,000 after acquiring an additional 21 shares during the last quarter. Hedge funds and other institutional investors own 80.56% of the company's stock.

About Applied Materials

Applied Materials, Inc is a global provider of materials engineering solutions used to manufacture semiconductors, displays and other advanced electronic products. The company develops and supplies equipment, services and software that help customers build and improve the performance of chips and display panels.

Its semiconductor products support processes including deposition, etch, patterning, inspection, metrology and materials modification. Applied Materials also provides equipment and services for display manufacturing, including technologies used in producing liquid-crystal and organic light-emitting diode displays, as well as solutions for adjacent markets such as solar and other specialty applications.

Founded in 1967 and headquartered in Santa Clara, California, Applied Materials serves semiconductor and display manufacturers worldwide through operations, customer-support centers and research and development activities across major technology-producing regions.

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