Applied Materials (AMAT)
Market Price (3/15/2026): $340.87 | Market Cap: $270.3 BilSector: Information Technology | Industry: Semiconductor Materials & Equipment
Applied Materials (AMAT)
Market Price (3/15/2026): $340.87Market Cap: $270.3 BilSector: Information TechnologyIndustry: Semiconductor Materials & Equipment
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 30% | Stock price has recently run up significantly6M Rtn6 month market price return is 104%, 12M Rtn12 month market price return is 121% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 31%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 22%, CFO LTM is 8.7 Bil, FCF LTM is 6.2 Bil | Weak revenue growthRev Chg QQuarterly Revenue Change % is -2.1% |
| Low stock price volatilityVol 12M is 48% | Valuation getting more expensiveP/S 6M Chg %Price/Sales change over 6 months. Declining P/S indicates valuation has become less expensive. is 67% |
| Megatrend and thematic driversMegatrends include Artificial Intelligence, Cloud Computing, 5G & Advanced Connectivity, and Advanced Materials. Show more. | Key risksAMAT key risks include [1] U.S. Show more. |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 30% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 31%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 22%, CFO LTM is 8.7 Bil, FCF LTM is 6.2 Bil |
| Low stock price volatilityVol 12M is 48% |
| Megatrend and thematic driversMegatrends include Artificial Intelligence, Cloud Computing, 5G & Advanced Connectivity, and Advanced Materials. Show more. |
| Stock price has recently run up significantly6M Rtn6 month market price return is 104%, 12M Rtn12 month market price return is 121% |
| Weak revenue growthRev Chg QQuarterly Revenue Change % is -2.1% |
| Valuation getting more expensiveP/S 6M Chg %Price/Sales change over 6 months. Declining P/S indicates valuation has become less expensive. is 67% |
| Key risksAMAT key risks include [1] U.S. Show more. |
Qualitative Assessment
AI Analysis | Feedback
1. Robust Global Semiconductor Market Growth Fueled by AI Adoption. The overarching positive sentiment in the semiconductor industry significantly bolstered Applied Materials' stock. The World Semiconductor Trade Statistics (WSTS) organization forecasts the global semiconductor market to grow by over 25% in 2026, potentially reaching USD 975 billion, with both memory and logic segments projected to increase by over 30% year-over-year. This growth is primarily driven by accelerated adoption of Artificial Intelligence (AI), edge computing, electric vehicles, and advanced packaging technologies. Deloitte also projected the global semiconductor industry to reach US$975 billion in annual sales in 2026, with growth accelerating to 26%, largely fueled by an intensifying AI infrastructure boom.
2. Applied Materials' Strategic Leadership in Key Technology Inflections. The company's strong positioning in high-growth areas crucial for next-generation chips, particularly those enabling AI, drove investor confidence. Applied Materials' technologies are essential for advancing AI and accelerating the commercialization of next-generation chips. Its advanced packaging business, currently valued at $1.5 billion, is on track to double to $3 billion in annual revenue in the coming years, propelled by High Bandwidth Memory (HBM) demand and advanced packaging architectures. In fiscal 2025, Applied Materials strengthened its leadership in DRAM, growing revenues from leading-edge customers by more than 50%.
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Stock Movement Drivers
Fundamental Drivers
The 35.6% change in AMAT stock from 11/30/2025 to 3/14/2026 was primarily driven by a 17.4% change in the company's P/E Multiple.| (LTM values as of) | 11302025 | 3142026 | Change |
|---|---|---|---|
| Stock Price ($) | 251.94 | 341.53 | 35.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 28,613 | 28,214 | -1.4% |
| Net Income Margin (%) | 23.9% | 27.8% | 16.4% |
| P/E Multiple | 29.4 | 34.5 | 17.4% |
| Shares Outstanding (Mil) | 798 | 793 | 0.6% |
| Cumulative Contribution | 35.6% |
Market Drivers
11/30/2025 to 3/14/2026| Return | Correlation | |
|---|---|---|
| AMAT | 35.6% | |
| Market (SPY) | -3.1% | 65.9% |
| Sector (XLK) | -4.4% | 72.1% |
Fundamental Drivers
The 113.1% change in AMAT stock from 8/31/2025 to 3/14/2026 was primarily driven by a 84.6% change in the company's P/E Multiple.| (LTM values as of) | 8312025 | 3142026 | Change |
|---|---|---|---|
| Stock Price ($) | 160.25 | 341.53 | 113.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 28,613 | 28,214 | -1.4% |
| Net Income Margin (%) | 23.9% | 27.8% | 16.4% |
| P/E Multiple | 18.7 | 34.5 | 84.6% |
| Shares Outstanding (Mil) | 798 | 793 | 0.6% |
| Cumulative Contribution | 113.1% |
Market Drivers
8/31/2025 to 3/14/2026| Return | Correlation | |
|---|---|---|
| AMAT | 113.1% | |
| Market (SPY) | 3.0% | 64.0% |
| Sector (XLK) | 4.4% | 71.0% |
Fundamental Drivers
The 118.0% change in AMAT stock from 2/28/2025 to 3/14/2026 was primarily driven by a 71.8% change in the company's P/E Multiple.| (LTM values as of) | 2282025 | 3142026 | Change |
|---|---|---|---|
| Stock Price ($) | 156.67 | 341.53 | 118.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 27,635 | 28,214 | 2.1% |
| Net Income Margin (%) | 23.0% | 27.8% | 21.0% |
| P/E Multiple | 20.1 | 34.5 | 71.8% |
| Shares Outstanding (Mil) | 814 | 793 | 2.6% |
| Cumulative Contribution | 118.0% |
Market Drivers
2/28/2025 to 3/14/2026| Return | Correlation | |
|---|---|---|
| AMAT | 118.0% | |
| Market (SPY) | 12.4% | 67.7% |
| Sector (XLK) | 21.9% | 75.1% |
Fundamental Drivers
The 201.7% change in AMAT stock from 2/28/2023 to 3/14/2026 was primarily driven by a 133.0% change in the company's P/E Multiple.| (LTM values as of) | 2282023 | 3142026 | Change |
|---|---|---|---|
| Stock Price ($) | 113.18 | 341.53 | 201.7% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 26,253 | 28,214 | 7.5% |
| Net Income Margin (%) | 24.6% | 27.8% | 13.1% |
| P/E Multiple | 14.8 | 34.5 | 133.0% |
| Shares Outstanding (Mil) | 845 | 793 | 6.6% |
| Cumulative Contribution | 201.7% |
Market Drivers
2/28/2023 to 3/14/2026| Return | Correlation | |
|---|---|---|
| AMAT | 201.7% | |
| Market (SPY) | 73.4% | 64.1% |
| Sector (XLK) | 104.5% | 74.7% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| AMAT Return | 84% | -38% | 68% | 1% | 60% | 37% | 325% |
| Peers Return | 50% | -23% | 50% | -4% | 61% | 21% | 223% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | -1% | 80% |
Monthly Win Rates [3] | |||||||
| AMAT Win Rate | 67% | 33% | 75% | 50% | 67% | 67% | |
| Peers Win Rate | 65% | 38% | 65% | 42% | 53% | 53% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 33% | |
Max Drawdowns [4] | |||||||
| AMAT Max Drawdown | 0% | -52% | -1% | -8% | -22% | 0% | |
| Peers Max Drawdown | -1% | -40% | -4% | -14% | -22% | 0% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -2% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: TXN, MCHP, AMAT, LRCX, KLAC. See AMAT Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 3/13/2026 (YTD)
How Low Can It Go
| Event | AMAT | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -55.4% | -25.4% |
| % Gain to Breakeven | 124.4% | 34.1% |
| Time to Breakeven | 459 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -43.6% | -33.9% |
| % Gain to Breakeven | 77.4% | 51.3% |
| Time to Breakeven | 147 days | 148 days |
| 2018 Correction | ||
| % Loss | -52.9% | -19.8% |
| % Gain to Breakeven | 112.5% | 24.7% |
| Time to Breakeven | 326 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -64.5% | -56.8% |
| % Gain to Breakeven | 182.1% | 131.3% |
| Time to Breakeven | 2,055 days | 1,480 days |
Compare to TXN, MCHP, AMAT, LRCX, KLAC
In The Past
Applied Materials's stock fell -55.4% during the 2022 Inflation Shock from a high on 1/14/2022. A -55.4% loss requires a 124.4% gain to breakeven.
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About Applied Materials (AMAT)
AI Analysis | Feedback
Here are 1-2 brief analogies for Applied Materials (AMAT):
- Applied Materials is like the Caterpillar of the semiconductor and display industries, providing the essential heavy machinery for making advanced chips and screens.
- Think of Applied Materials as the Deere & Company for high-tech manufacturing, supplying the specialized equipment and services critical to producing the world's semiconductors and electronic displays.
AI Analysis | Feedback
Applied Materials (AMAT) provides the following major products and services:
- Semiconductor Manufacturing Equipment: Equipment used for various processes in fabricating integrated circuits, including deposition, etching, and planarization.
- Metrology and Inspection Tools: Devices designed for measuring and examining semiconductor wafers to ensure quality and precision during manufacturing.
- Display Manufacturing Products: Equipment for producing liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), and other advanced display technologies.
- Equipment Spares and Upgrades: Services providing replacement parts and enhancements to optimize the performance and extend the life of manufacturing equipment.
- Equipment Services: Integrated solutions and support aimed at maintaining and improving the operational efficiency and productivity of manufacturing equipment and facilities.
- Remanufactured Equipment: Sales of refurbished earlier-generation manufacturing equipment for cost-effective solutions.
- Factory Automation Software: Software solutions that automate and optimize manufacturing operations within semiconductor and display fabrication plants.
AI Analysis | Feedback
Applied Materials (AMAT) sells primarily to other companies. Its major customers are the world's leading manufacturers of semiconductor chips (integrated circuits) and display panels (such as LCDs and OLEDs).
Based on the company's description and the industries it serves, its major customers include, but are not limited to, the following public companies:
- Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE: TSM)
- Samsung Electronics Co., Ltd. (KRX: 005930 or ADR: SSNLF) - a major manufacturer of both semiconductor chips and display panels
- Intel Corporation (NASDAQ: INTC)
- Micron Technology, Inc. (NASDAQ: MU)
- SK Hynix Inc. (KRX: 000660)
- LG Display Co., Ltd. (NYSE: LPL or KRX: 034220)
- BOE Technology Group Co., Ltd. (SHE: 000725)
AI Analysis | Feedback
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AI Analysis | Feedback
Gary E. Dickerson, President and Chief Executive Officer
Gary Dickerson has served as President of Applied Materials since June 2012 and as Chief Executive Officer and a member of the board of directors since September 2013. He has over 35 years of experience in the semiconductor industry. Prior to joining Applied Materials, he was the CEO of Varian Semiconductor Equipment Associates, Inc. for seven years, until its acquisition by Applied Materials in 2011. Dickerson also spent 18 years at KLA-Tencor Corporation, where he held various operations and product development roles, eventually serving as President and Chief Operating Officer. He began his career in manufacturing and engineering management at General Motors' Delco Electronics Division and AT&T Technologies. He successfully negotiated Applied Materials' $4.9 billion cash acquisition of Varian Semiconductor.
Brice Hill, Senior Vice President, Chief Financial Officer and Global Information Services
Brice Hill joined Applied Materials as Senior Vice President, Chief Financial Officer, and Global Information Services in March 2022. He brings 25 years of finance leadership experience within the semiconductor industry. Before joining Applied Materials, Hill served as Executive Vice President and CFO of Xilinx, Inc., through its acquisition by AMD. For over two decades, he held various finance leadership roles at Intel Corporation, including CFO and Chief Operating Officer of the Technology, Systems & Core Engineering Group. His career began at General Motors Corporation in various finance positions.
Omkaram Nalamasu, Ph.D., Senior Vice President and Chief Technology Officer
Dr. Omkaram Nalamasu is Senior Vice President and Chief Technology Officer (CTO) of Applied Materials, Inc., and also serves as President of Applied Ventures, LLC, the company's venture capital fund. He joined Applied Materials in 2006. Prior to his tenure at Applied Materials, he was an NYSTAR Distinguished Professor of materials science and engineering and Vice President of Research at Rensselaer Polytechnic Institute. Dr. Nalamasu held key research and development leadership positions at AT&T Bell Laboratories, Bell Laboratories/Lucent Technologies, and Agere Systems, Inc. While at Bell Labs, he established the United States' first public-private partnership for nanotechnology commercialization.
Prabu Raja, Ph.D., President, Semiconductor Products Group
Dr. Prabu Raja is President of Applied Materials' Semiconductor Products Group (SPG), leading the company's semiconductor process equipment businesses and global field organization. He started his career at Applied Materials in 1995 as a process engineer. He previously served as Group Vice President and General Manager of the Patterning and Packaging Group. In 2010, he was recognized as an Applied Materials Fellow for his significant technical contributions. Dr. Raja was instrumental in developing Applied Materials' advanced packaging strategy.
Teri Little, Senior Vice President, Chief Legal Officer and Corporate Secretary
Teri Little serves as Senior Vice President, Chief Legal Officer, and Corporate Secretary at Applied Materials. In this role, she is responsible for managing the legal and governance aspects of the company, ensuring compliance and effective risk management.
AI Analysis | Feedback
Key Risks to Applied Materials (AMAT)
- Geopolitical Tensions and Export Controls (China Exposure): Applied Materials faces significant risks due to increasing U.S. export controls on advanced logic and memory tools to China. China was previously a major market for AMAT, accounting for a substantial portion of its revenue, which has since dropped. Management forecasts a further revenue headwind in 2026 due to expanded restrictions, and the company has incurred settlements related to past export control violations, indicating ongoing regulatory scrutiny.
- Cyclicality of the Semiconductor Industry and Global Economic Uncertainties: The semiconductor industry is inherently cyclical and highly sensitive to global economic conditions. Applied Materials' financial performance is closely tied to these fluctuations, as economic downturns or broader geopolitical tensions can lead to reduced capital expenditure by chipmakers, directly impacting AMAT's orders and revenue.
- Customer Concentration Risk: Applied Materials has a highly concentrated customer base, with a significant portion of its revenue derived from a few large chipmakers such as TSMC, Samsung, and Intel. Any shifts in the spending patterns of these major clients or the loss of a key customer could materially affect AMAT's financial performance and market position.
AI Analysis | Feedback
The clear emerging threat for Applied Materials is the significant push by China to develop its domestic semiconductor equipment industry. Backed by substantial government investment and strategic policy, Chinese equipment manufacturers are rapidly advancing their capabilities with the explicit goal of achieving self-sufficiency and reducing reliance on foreign suppliers like Applied Materials. This initiative poses a direct threat to Applied Materials' market share and long-term revenue in the critical Chinese market, as geopolitical factors increasingly favor local alternatives.
AI Analysis | Feedback
Applied Materials (AMAT) operates in key addressable markets related to semiconductor manufacturing equipment, display manufacturing equipment, and associated services. The market sizes for their main products and services are outlined below:
Semiconductor Systems
The Semiconductor Systems segment provides manufacturing equipment used to fabricate semiconductor chips. The global market for semiconductor manufacturing equipment demonstrates substantial scale and growth:
- The global semiconductor manufacturing equipment market was valued at approximately USD 110.50 billion in 2024 and is projected to reach around USD 206.05 billion by 2034, with a compound annual growth rate (CAGR) of approximately 8.10% between 2025 and 2034.
- Another estimate indicates the global semiconductor manufacturing equipment market size was valued at USD 118.88 billion in 2025 and is projected to reach USD 224.93 billion by 2033, growing at a CAGR of 8.4% from 2026 to 2033.
- Global sales of total semiconductor manufacturing equipment by original equipment manufacturers (OEMs) are forecast to reach a record high of USD 133 billion in 2025, growing 13.7% year-on-year, with projections of USD 145 billion in 2026 and USD 156 billion in 2027.
- The front-end equipment segment is projected to lead the market with an 84.64% share in 2026.
- The Asia Pacific region dominated the semiconductor manufacturing equipment industry with the largest revenue share of 69.0% in 2025.
Applied Global Services
The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity, including spares, upgrades, services, remanufactured equipment, and factory automation software for semiconductor and display products. A direct, standalone addressable market size specifically for "Applied Global Services" was not readily available as a distinct market from the overall equipment sales and aftermarket support for the installed base. However, its market is intrinsically linked to the overall semiconductor manufacturing equipment market and the installed base of equipment that it services and maintains. Applied Materials' own services business is noted to be supporting a double-digit growth rate.
Display and Adjacent Markets
The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), and other display technologies globally:
- Global display equipment spending is expected to reach a cumulative USD 76 billion during 2020-2027.
- The global flat panel display manufacturing equipment market size was valued at approximately USD 17.5 billion in 2023 and is projected to reach around USD 29.3 billion by 2032, exhibiting a CAGR of 5.8% during the forecast period.
- OLED is projected to account for 67% of total display equipment spending from 2023 to 2030, followed by LCD at 30%.
- The global OLED market size was accounted at USD 68.27 billion in 2025 and is predicted to increase from USD 82.67 billion in 2026 to approximately USD 385.91 billion by 2035, growing at a CAGR of 18.91% from 2026 to 2035.
- The OLED Deposition Equipment Market was valued at USD 2,510 million in 2024 and is expected to grow from USD 2,690 million in 2025 to USD 5.2 billion by 2035, with a CAGR of around 6.9% during the forecast period (2025 - 2035).
- The liquid crystal display (LCD) market was valued at USD 2.14 billion in 2025 and is estimated to grow from USD 2.33 billion in 2026 to reach USD 3.56 billion by 2031, at a CAGR of 8.85% during the forecast period (2026-2031).
- Asia Pacific is expected to contribute 46% to the growth of the global flat panel display equipment market during the forecast period.
AI Analysis | Feedback
Applied Materials (AMAT) is anticipated to experience future revenue growth over the next 2-3 years driven by several key factors:
- AI-Driven Semiconductor Demand: The surging demand for artificial intelligence (AI) applications is fueling significant investments in leading-edge foundry-logic, high-bandwidth memory (HBM), and advanced packaging technologies. Applied Materials expects its semiconductor equipment business to grow by more than 20% in calendar year 2026, largely attributed to AI infrastructure investments. This strong demand across these segments is expanding the market opportunity for their differentiated materials engineering portfolio.
- Innovation and New Product Introductions: Applied Materials is continuously investing in research and development (R&D) and launching new products designed for advanced technology inflections. These innovations target next-generation chips, including advanced transistors, Gate-All-Around (GAA) structures, and other 3D scaling approaches in both logic and DRAM. The company plans to introduce more than a dozen new products in 2026, which are critical for enabling their customers' roadmaps and capturing market share.
- Expansion of Applied Global Services (AGS): The Applied Global Services segment provides integrated solutions such as spares, upgrades, services, and factory automation software. This segment is transitioning to an entirely recurring revenue model in 2026, offering a stable and growing revenue stream. Core services within AGS have demonstrated double-digit growth, bolstered by healthy utilization rates in leading-edge foundry-logic and high-bandwidth memory.
- Growth in Display Technology Adoption: The Display and Adjacent Markets segment is expected to contribute to revenue growth through continued industry investments in equipment supporting the broader adoption of advanced display technologies, particularly organic light-emitting diode (OLED) technology, in consumer devices.
AI Analysis | Feedback
Share Repurchases
- Applied Materials authorized a new $10 billion share repurchase program in March 2025, augmenting an existing authorization that had approximately $7.6 billion remaining at the end of Q1 fiscal 2025.
- The company's annual share repurchases amounted to approximately $4.895 billion in 2025, $3.823 billion in 2024, and $2.189 billion in 2023.
- Over the four years preceding March 2025, Applied Materials returned $19.7 billion to shareholders through a combination of dividends and share buybacks.
Outbound Investments
- In April 2025, Applied Materials made a strategic, long-term investment by purchasing 9% of the outstanding shares of BE Semiconductor Industries N.V. (Besi). This investment is intended to further the co-development of a fully integrated equipment solution for die-based hybrid bonding, a critical technology for advanced semiconductor packaging.
- Applied Materials acquired Picosun, a developer of thin film coating machinery for industrial purposes, in June 2022. The financial terms of this acquisition were not disclosed.
Capital Expenditures
- Annual capital expenditures were $2.26 billion in 2025, $1.19 billion in 2024, and $1.106 billion in 2023.
- Capital expenditures for the twelve months ending January 31, 2026, were $646 million.
- A significant capital investment has been made in the EPIC lab in Sunnyvale, which aims to foster innovation and collaboration with partners such as Micron and Samsung.
Latest Trefis Analyses
Trade Ideas
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| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 02282026 | BMI | Badger Meter | Insider | Insider Buys 45DStrong Insider BuyingCompanies with multiple insider buys in the last 45 days | 0.0% | 0.0% | 0.0% |
| 02282026 | VRNS | Varonis Systems | Insider | Insider Buys 45DStrong Insider BuyingCompanies with multiple insider buys in the last 45 days | 0.0% | 0.0% | 0.0% |
| 02272026 | ITRI | Itron | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 0.0% | 0.0% | 0.0% |
| 02272026 | FSLR | First Solar | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 0.0% | 0.0% | 0.0% |
| 02272026 | PEGA | Pegasystems | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 0.0% | 0.0% | 0.0% |
| 04302025 | AMAT | Applied Materials | Insider | Insider Buys | Low D/EStrong Insider BuyingCompanies with strong insider buying in the last 1 month, positive operating income and reasonable debt / market cap | 57.3% | 149.2% | -1.2% |
| 08312022 | AMAT | Applied Materials | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 25.2% | 63.9% | -20.9% |
| 05312019 | AMAT | Applied Materials | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 50.8% | 47.4% | -0.7% |
Research & Analysis
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 212.20 |
| Mkt Cap | 186.2 |
| Rev LTM | 17,682 |
| Op Inc LTM | 6,140 |
| FCF LTM | 4,377 |
| FCF 3Y Avg | 3,636 |
| CFO LTM | 7,122 |
| CFO 3Y Avg | 5,645 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 13.0% |
| Rev Chg 3Y Avg | 2.4% |
| Rev Chg Q | 10.4% |
| QoQ Delta Rev Chg LTM | 2.4% |
| Op Mgn LTM | 33.8% |
| Op Mgn 3Y Avg | 30.3% |
| QoQ Delta Op Mgn LTM | 0.2% |
| CFO/Rev LTM | 34.6% |
| CFO/Rev 3Y Avg | 33.2% |
| FCF/Rev LTM | 22.0% |
| FCF/Rev 3Y Avg | 24.2% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 186.2 |
| P/S | 9.8 |
| P/EBIT | 33.7 |
| P/E | 34.7 |
| P/CFO | 36.8 |
| Total Yield | 3.0% |
| Dividend Yield | 0.5% |
| FCF Yield 3Y Avg | 3.8% |
| D/E | 0.0 |
| Net D/E | 0.0 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | -8.1% |
| 3M Rtn | 19.0% |
| 6M Rtn | 47.6% |
| 12M Rtn | 100.5% |
| 3Y Rtn | 195.8% |
| 1M Excs Rtn | -7.3% |
| 3M Excs Rtn | 16.3% |
| 6M Excs Rtn | 45.5% |
| 12M Excs Rtn | 89.1% |
| 3Y Excs Rtn | 125.7% |
Comparison Analyses
Segment Financials
Revenue by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Semiconductor Systems | 19,911 | 19,698 | 18,797 | 16,286 | 11,367 |
| Applied Global Services | 6,225 | 5,732 | 5,543 | 5,013 | 4,155 |
| Corporate and Other | 1,040 | 219 | 114 | 130 | 73 |
| Display | 868 | 1,331 | 1,634 | 1,607 | |
| Total | 27,176 | 26,517 | 25,785 | 23,063 | 17,202 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Semiconductor Systems | 6,981 | 6,879 | 6,969 | 6,311 | 3,714 |
| Applied Global Services | 1,812 | 1,529 | 1,661 | 1,508 | 1,127 |
| Corporate and Other | -926 | -868 | -1,102 | -1,244 | -767 |
| Display | 114 | 260 | 314 | 291 | |
| Total | 7,867 | 7,654 | 7,788 | 6,889 | 4,365 |
Price Behavior
| Market Price | $341.53 | |
| Market Cap ($ Bil) | 270.8 | |
| First Trading Date | 09/07/1984 | |
| Distance from 52W High | -13.5% | |
| 50 Days | 200 Days | |
| DMA Price | $331.13 | $235.35 |
| DMA Trend | up | up |
| Distance from DMA | 3.1% | 45.1% |
| 3M | 1YR | |
| Volatility | 52.1% | 48.0% |
| Downside Capture | 245.05 | 184.10 |
| Upside Capture | 476.33 | 235.67 |
| Correlation (SPY) | 66.7% | 67.5% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 2.76 | 2.73 | 2.71 | 2.45 | 1.65 | 1.76 |
| Up Beta | 0.94 | 0.84 | 1.56 | 1.34 | 1.48 | 1.58 |
| Down Beta | 0.90 | 1.10 | 1.71 | 1.94 | 1.42 | 1.44 |
| Up Capture | 555% | 734% | 640% | 745% | 517% | 1888% |
| Bmk +ve Days | 9 | 20 | 31 | 70 | 142 | 431 |
| Stock +ve Days | 13 | 24 | 38 | 78 | 141 | 394 |
| Down Capture | 246% | 221% | 205% | 176% | 134% | 112% |
| Bmk -ve Days | 12 | 21 | 30 | 54 | 109 | 320 |
| Stock -ve Days | 8 | 17 | 23 | 46 | 110 | 358 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with AMAT | |
|---|---|---|---|---|
| AMAT | 131.9% | 48.0% | 1.90 | - |
| Sector ETF (XLK) | 30.0% | 26.8% | 0.95 | 74.7% |
| Equity (SPY) | 19.6% | 18.9% | 0.81 | 67.1% |
| Gold (GLD) | 71.9% | 26.3% | 2.05 | 11.5% |
| Commodities (DBC) | 19.3% | 17.3% | 0.89 | 22.2% |
| Real Estate (VNQ) | 6.2% | 16.3% | 0.19 | 32.6% |
| Bitcoin (BTCUSD) | -15.3% | 44.2% | -0.25 | 34.4% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with AMAT | |
|---|---|---|---|---|
| AMAT | 27.5% | 43.4% | 0.70 | - |
| Sector ETF (XLK) | 17.7% | 24.7% | 0.64 | 77.7% |
| Equity (SPY) | 13.1% | 17.0% | 0.61 | 69.9% |
| Gold (GLD) | 24.1% | 17.3% | 1.14 | 14.2% |
| Commodities (DBC) | 11.2% | 19.0% | 0.47 | 18.2% |
| Real Estate (VNQ) | 4.8% | 18.8% | 0.16 | 36.3% |
| Bitcoin (BTCUSD) | 6.3% | 56.7% | 0.33 | 29.1% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with AMAT | |
|---|---|---|---|---|
| AMAT | 34.7% | 42.2% | 0.85 | - |
| Sector ETF (XLK) | 21.8% | 24.2% | 0.82 | 76.6% |
| Equity (SPY) | 14.5% | 17.9% | 0.70 | 70.4% |
| Gold (GLD) | 14.4% | 15.6% | 0.77 | 8.2% |
| Commodities (DBC) | 8.6% | 17.6% | 0.40 | 22.7% |
| Real Estate (VNQ) | 5.6% | 20.7% | 0.23 | 41.8% |
| Bitcoin (BTCUSD) | 67.4% | 66.8% | 1.07 | 20.1% |
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Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 2/12/2026 | 8.1% | 14.3% | |
| 11/13/2025 | 1.2% | -1.2% | 16.2% |
| 8/14/2025 | -14.1% | -14.8% | -8.9% |
| 5/15/2025 | -5.3% | -7.9% | 1.3% |
| 2/13/2025 | -8.2% | -6.5% | -15.4% |
| 11/14/2024 | -9.2% | -5.3% | -8.7% |
| 8/15/2024 | -1.9% | -5.3% | -11.3% |
| 2/15/2024 | 6.3% | 5.2% | 7.1% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 9 | 11 | 12 |
| # Negative | 14 | 12 | 10 |
| Median Positive | 3.9% | 3.8% | 5.2% |
| Median Negative | -3.9% | -5.2% | -10.1% |
| Max Positive | 8.1% | 14.3% | 27.2% |
| Max Negative | -14.1% | -14.8% | -16.9% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 01/31/2026 | 02/19/2026 | 10-Q |
| 10/31/2025 | 12/12/2025 | 10-K |
| 07/31/2025 | 08/21/2025 | 10-Q |
| 04/30/2025 | 05/22/2025 | 10-Q |
| 01/31/2025 | 02/20/2025 | 10-Q |
| 10/31/2024 | 12/13/2024 | 10-K |
| 07/31/2024 | 08/22/2024 | 10-Q |
| 04/30/2024 | 05/23/2024 | 10-Q |
| 01/31/2024 | 02/27/2024 | 10-Q |
| 10/31/2023 | 12/15/2023 | 10-K |
| 07/31/2023 | 08/24/2023 | 10-Q |
| 04/30/2023 | 05/26/2023 | 10-Q |
| 01/31/2023 | 02/23/2023 | 10-Q |
| 10/31/2022 | 12/16/2022 | 10-K |
| 07/31/2022 | 08/25/2022 | 10-Q |
| 04/30/2022 | 05/26/2022 | 10-Q |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Sanders, Adam | Corp. Controller & CAO | Direct | Sell | 12032025 | 255.53 | 609 | 155,620 | 1,127,672 | Form |
| 2 | Little, Teri A | SVP, CLO | Direct | Sell | 11262025 | 238.24 | 4,000 | 952,942 | 20,095,403 | Form |
| 3 | Little, Teri A | SVP, CLO | Direct | Sell | 11212025 | 234.08 | 4,000 | 936,321 | 20,681,220 | Form |
| 4 | Sanders, Adam | Corp. Controller & CAO | Direct | Sell | 6252025 | 178.60 | 562 | 100,373 | 946,580 | Form |
| 5 | Dickerson, Gary E | President and CEO | Direct | Buy | 4072025 | 137.30 | 50,000 | 6,865,082 | 235,617,571 | Form |
AMAT Trade Sentinel
OVERWEIGHT (Score 9-10)
CONVICTION RATIONALE
The calculated probability-adjusted skew is greater than 2.0x. The investment thesis rests on a powerful, secular AI-driven capital spending cycle, which is supported by strong leading indicators (customer capex plans). While the stock's valuation is elevated and its competitive position is contested, the sheer force of the AI 'rising tide' provides a significant tailwind that outweighs the quantifiable geopolitical risks. The risk/reward profile is highly attractive.
STOCK ARCHETYPE
Cyclical / CommodityAMAT's revenue is directly tied to the capital expenditure cycles of semiconductor manufacturers. Its business performance is determined by the supply/demand balance for wafer fab equipment (WFE), making it a classic cyclical company where timing the cycle is critical.
INVESTMENT THESIS
The primary long thesis for AMAT is its position as a key enabler of the artificial intelligence and high-performance computing megatrend. This secular shift necessitates the buildout of leading-edge semiconductor manufacturing capacity for new, complex chip architectures like Gate-All-Around (GAA). This is not a typical cyclical recovery; it is a technology-driven arms race.
- Leading customer TSMC is increasing 2026 CapEx to $52-$56 billion, a YoY growth of approximately 32%, with 70-80% allocated to advanced process technologies.
- Management is preparing for higher demand in the second half of calendar 2026, driven by AI adoption.
- FY25 non-GAAP gross margin was the highest in 25 years, driven by a favorable mix of advanced systems for AI workloads.
PRIMARY RISK
The most significant and quantifiable headwind is the U.S. government's escalating export restrictions on China's semiconductor industry. This is not a cyclical or competitive issue, but a direct regulatory barrier that removes a material portion of the market from AMAT's reach, irrespective of the strong global demand from other regions.
- Management has quantified the negative revenue impact at approximately $600 million for the full fiscal year 2026.
- The risk is classified as 'Regulatory/Geopolitical' and is a structural change to the company's addressable market in a key geography.
| KPI | Threshold | Rationale |
|---|---|---|
| Key Customer CapEx Guidance (TSMC, Intel, Samsung) | Maintain or Increase 2026/2027 Forecasts | This is the most critical leading indicator for future equipment demand and the primary driver of the entire investment thesis. |
| Semiconductor Systems Revenue Growth | Return to Positive YoY growth in H2 2026 | This is the core, high-margin growth engine. A return to growth will validate that the cyclical trough is over and the AI-driven recovery has begun. |
| Order Backlog | Stabilization and Sequential Growth | While the company has de-emphasized this metric, a reversal of the recent declining trend would provide tangible evidence of improving near-term demand. |
Secular AI Boom vs. Cyclical/Geopolitical Reality
BULL VIEW
The AI-driven demand for advanced chips is a multi-year supercycle. This will force customers to increase CapEx, overriding near-term headwinds and driving a strong H2 2026 recovery.
CORE TENSION
The market prices in a powerful AI-driven recovery while current data shows decelerating orders, negative revenue growth, and tangible impact from US-China export controls.
PREVAILING SENTIMENT
The Order Backlog, a key forward-looking metric, declined 5.5% YoY to $15.0B in the latest quarter (Oct 2025), indicating a tangible slowdown in customer demand.
BEAR VIEW
The declining backlog, quantified $600M China revenue impact, and ongoing DOJ investigation are being ignored. The stock's high valuation is disconnected from these weakening fundamentals.
| Timeline | Event & Metric To Watch |
|---|---|
Q1-Q2 2026 Earnings Calls | Key Customer CapEx Guidance (Intel, Samsung) Watch: Downward revisions to FY2026 CapEx plans or commentary about a 'digestion phase' after heavy spending. |
Anytime | Escalation of US-China Tech Export Controls Watch: Any announcement from the U.S. Dept. of Commerce adding new Chinese firms to the Entity List or restricting new tool types. |
Next 30-90 Days | Memory Sector Capex Guidance (Micron, SK Hynix) Watch: Memory producers' guidance on inventory levels and pricing. A forecast of weakness implies WFE spending cuts. |
| Date | Event | Stock Impact |
|---|---|---|
8/15/2025 | Q3 FY2025 Earnings Report Details: The company reported earnings and revenue that surpassed analyst expectations, demonstrating solid execution despite early signs of a market slowdown. | Modest 1.1% gain $160.97 -> $162.74 |
9/18/2025 | AI Narrative Gains Momentum Details: A broad-based rally in semiconductor stocks occurred as multiple analyst reports highlighted an AI-driven demand 'supercycle', boosting sentiment for equipment providers like AMAT. | Surged +6.53% $177.78 -> $189.38 |
11/4/2025 | Reports on DOJ Investigation Details: Stock dropped on heightened investor concern following media reports detailing the ongoing DOJ and SEC investigations into potential evasion of China export restrictions. | Fell notably by 3.16% $237.24 -> $229.73 |
11/13/2025 | Q4 FY2025 Earnings & Guidance Details: AMAT beat consensus estimates for revenue and EPS. However, it also quantified a $600M negative revenue impact for FY2026 from new US export controls on China. | Modest 1.25% gain $223.23 -> $226.01 |
1/5/2026 | Key Customer Signals Major Capex Increase Details: Stock rallied following reports confirming key customer TSMC's plan to boost 2026 CapEx by ~32%, signaling strong demand for advanced equipment driven by the AI arms race. | Surged +5.75% $268.87 -> $284.32 |
1/29/2026 | Stock Hits 52-Week High Details: Shares reached a new 52-week high as investor enthusiasm for the AI infrastructure build-out narrative continued, pushing valuations across the semiconductor sector higher. | Modest 1.36% gain $336.75 -> $341.34 |
Position Sizing
1% - 3%
CONSERVATIVE
Given the bearish sentiment, high relative volatility, and contested moat, a conservative allocation is prudent until fundamentals show clearer signs of recovery or de-risking events pass.
Diversification Alternatives
Applied Materials is re-rating from a cyclical Wafer Fab Equipment (WFE) supplier to a key enabler of the AI hardware buildout, with accelerating demand in leading-edge logic, DRAM, and advanced packaging driving growth that is outpacing the broader semiconductor market.
Filter all news through the lens of AI-driven capital intensity in semiconductor manufacturing. Focus on a few key high-growth product areas and ignore broader, cyclical WFE spending noise.
News of accelerated customer spending on leading-edge foundry/logic and High-Bandwidth Memory (HBM) DRAM. Announcements of market share gains in deposition and etch for Gate-All-Around (GAA) transistors. Evidence of strong growth in advanced packaging WFE spending.
A slowdown in AI-related capital expenditure plans from major customers (TSMC, Samsung, Intel). Significant market share loss in key deposition or etch markets to competitors like Lam Research. A sharp decline in the services (AGS) revenue growth rate, which would signal a weakening installed base value.
General macroeconomic forecasts for the semiconductor industry; quarterly fluctuations in NAND memory spending (management has flagged this as weak); minor shifts in overall WFE market share that don't specify the high-value segments; single-customer press releases that don't alter the aggregate demand picture.
Repricing Catalyst
The primary catalyst is the accelerating, multi-year investment cycle in AI infrastructure, which requires a step-function increase in manufacturing complexity. Management projects its semiconductor equipment business will grow over 20% in calendar 2026, driven by demand for Gate-All-Around (GAA) transistors, High-Bandwidth Memory (HBM), and advanced packaging where AMAT holds #1 market positions.
Semiconductor Manufacturing Equipment
$20.6B TTM (73% of Total) · 54.5% MarginWhat It Is
Equipment for Deposition (adding materials), Etch (removing materials), Chemical Mechanical Planarization (CMP), and Ion Implantation. Key products enable Gate-All-Around (GAA) transistors and advanced 3D packaging.
Who Pays & How
Major chipmakers like TSMC, Samsung, and Intel pay billions for this equipment because manufacturing advanced chips (e.g., 3nm nodes) is impossible without it. High switching costs due to deep process integration and tool qualification create significant customer lock-in. Two customers represented ~19% and ~15% of revenue in FY2025.
Competition
Global Services & Maintenance (AGS)
$6.2B TTM (22% of Total) · 34.4% MarginWhat It Is
Provides services, spare parts, and factory automation software for the installed base of AMAT equipment. Also sells older generation 200mm equipment.
Who Pays & How
The same customers who buy the equipment pay for ongoing service contracts to ensure high uptime and yield in their multi-billion dollar fabs. This is a recurring and stable revenue stream tied to the world's largest installed base of semiconductor equipment.
Competition
Display & Adjacent Markets
$1.2B TTM (5% of Total) · 30.0% MarginWhat It Is
Equipment to manufacture liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), and other display technologies for TVs, computers, and smartphones.
Who Pays & How
Display manufacturers (e.g., Samsung Display, LG Display) pay for this equipment to build new factories or upgrade existing ones to produce higher-resolution or more efficient screens.
Competition
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