Here’s What Drove Applied Materials Stock’s 4x Rise Since 2018
Applied Materials Inc. (NASDAQ: AMAT) stock price grew more than 4x from around $33 at 2018 end to $134 currently, driven primarily by an almost 3x jump in its P/S multiple. Additionally, a steady rise in revenues and a drop in the outstanding share count further helped boost the company’s share price.
In our interactive dashboard, Why Applied Materials Stock Moved: AMAT Stock Has Gained 309% Since 2018, we break down the factors behind this move.
(A) Applied Materials’ Total Revenue has grown 45% from $16.7 billion in 2018 to $24.2 billion on an LTM basis
- Applied Materials’ total revenue first dropped from $16.7 billion in FY ’18 to $14.6 billion in FY ’19, as the semiconductor supply glut hampered sales.
- However, driven by a revival in demand post the pandemic, sales have steadily risen to $24.2 billion on an LTM basis (Applied Materials’ fiscal year ends in October).
- Semiconductor systems sales make up the bulk of Applied Materials’ revenues, with $6.68 billion of the company’s sales coming from this segment as of FY ’21, making up almost 60% of total revenue.
- For details about Applied Materials’ revenues and comparison to peers, see Applied Materials (AMAT) Revenue Comparison
- Rallying 30% YTD, What’s Spurring The Rally In Applied Materials’ Stock?
- Up 35% This Year, How Will Applied Materials Stock Trend Following Q4 Results?
- Up 50% This Year, Will Applied Materials Stock Continue To Outperform?
- What To Expect As Applied Materials Reports Q3 Earnings?
- What’s Happening With Applied Materials Stock?
- What To Expect From Applied Materials Q2 Results?
(B) Revenue per share (RPS) increased more than 60% from $16.50 in 2018 to $27.25 currently
- Applied Materials’ revenue rose from $16.7 billion in 2018 to $24.2 billion currently, while the outstanding share count decreased strongly from 1.01 billion in 2018 to 887 million currently.
- Due to this, RPS has risen sharply from $16.50 in FY ’18 to $27.25 currently.
(C) Price-To-Sales (P/S) multiple for Applied Materials rose steadily from 1.7x in 2018 to 6x in 2021, but stands at 4.9x currently, still almost 3x higher than its 2018 level
- Due to rising expectations around Applied Materials’ sales recovery since the pandemic and continuing demand growth for its products, its P/S multiple rose steadily to 6x in 2021.
- However, amidst current geopolitical tensions dragging down the broader markets, the P/S multiple has pulled back and currently stands at a little under 5x.
- For additional details about the company’s historical returns and comparison to peers, see Applied Materials (AMAT) Stock Return.
What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.
| Returns | Mar 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| AMAT Return | 0% | -15% | 315% |
| S&P 500 Return | 1% | -7% | 97% |
| Trefis MS Portfolio Return | 1% | -9% | 259% |
[1] Month-to-date and year-to-date as of 3/18/2022
[2] Cumulative total returns since the end of 2016
Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates