How Much Should This Move Change Your View Of Applied Materials Stock?

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Applied Materials (AMAT) stock rose 81.9% in the year to October 21, 2026, against 16.5% for the S&P 500. The advance occurred during a year when management consistently forecast stronger sales based on demand for AI chipmaking tools, starting with its November 13, 2025, outlook. Those projections involved sales that had not yet materialized. So how much of that gain has the business itself earned?

Has Applied Materials’ Profit Kept Up With Its Stock?

Not fully. A stock can rise for two reasons: the company earns more per share, or buyers pay a higher premium for those earnings. Applied Materials earned $11.6 a share over the four fiscal quarters to July 26, 2026, up 38% from a year earlier. Operating profit rose a slower 11% over the same months. That growth explains only about half of the stock’s rise, so a large portion of the gain came from buyers paying more for each dollar of profit.

The shares now sell for 35.0 times earnings, compared with 23.0 for the S&P 500. The stock has already demonstrated how sharply that price can swing: it closed at $722.23 on June 30, 2026, its highest close of the past year, before ending October 21 at $408.94, a drop of about 43% from that peak.

Applied Materials’ Forecasts And The Sales That Followed

Management has forecast stronger sales tied to AI demand throughout the year. On November 13, 2025, the company issued an upbeat revenue outlook and said customers are planning large production increases at their chip factories. Executives followed up on August 13, 2026, by forecasting fourth-quarter revenue above Wall Street expectations. As Forbes wrote in January 2026, the stock’s level reflected strong investor optimism around AI-driven spending by chipmakers.

Sales growth picked up through fiscal 2026. After falling 2.1% from a year earlier in fiscal Q1 2026, which ended January 25, 2026, revenue rebounded with 11.4% growth in fiscal Q2. By fiscal Q3, which ended July 26, 2026, revenue reached $9.12 billion, up 24.8%. Profit on those sales improved as well: the operating margin expanded to 33.7% that quarter, against 30.6% a year earlier.

What Has Not Changed At Applied Materials?

The business mix held steady in the latest full fiscal year. Semiconductor Systems, the company’s largest segment, accounted for 73.3% of sales in fiscal 2025. That matches its share from fiscal 2024, with Applied Global Services generating most of the remaining revenue.

Over a full year, Applied Materials is also still a single-digit grower. Sales over the four quarters to July 26, 2026, totaled $30.8 billion, an increase of 7.8% from a year earlier. Growth over the twelve months before that was 6.6%, meaning the full-year pace has barely moved. Yet buyers now pay 10.5 times those sales for the shares, compared with 3.1 for the S&P 500. Quarterly revenue growth against a year earlier is the number to watch when Applied Materials reports next, expected in November 2026.

Does This Mean You Should Act On AMAT?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

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