Applied Materials Stock Surged 70%, Here’s Why
Applied Materials (AMAT)’s stock soared 65%, fueled by a robust revenue bump and soaring investor optimism, even as profit margins slipped. Behind this leap: booming AI demand, solid earnings, chip sector rebound, China trade hurdles, and strategic shareholder rewards. Let’s unpack these forces driving the surge.
Below is an analytical breakdown of stock movement into key contributing metrics.
| 12102024 | 12102025 | Change | |
|---|---|---|---|
| Stock Price ($) | 166.5 | 275.1 | 65.3% |
| Change Contribution By | LTM | LTM | |
| Total Revenues ($ Mil) | 26,854.0 | 28,613.0 | 6.6% |
| Net Income Margin (%) | 27.7% | 23.9% | -13.9% |
| P/E Multiple | 18.5 | 32.1 | 74.1% |
| Shares Outstanding (Mil) | 826.0 | 798.0 | 3.4% |
| Cumulative Contribution | 65.1% |
So what is happening here? The stock surged 65%, driven by a 6.6% revenue increase and a 74% jump in P/E multiple, despite a 14% drop in net margin. Let’s dive into the events behind these shifts.
Here Is Why Applied Materials Stock Moved
- AI Demand Surge: Rising demand for AI infrastructure, advanced memory, and logic chips drove equipment sales.
- Strong Earnings: Applied Materials generally beat EPS forecasts and reported record revenue in early 2025.
- Semiconductor Recovery: Broader semiconductor market recovery and increased wafer fab equipment spending.
- China Trade Headwinds: Export restrictions and capacity digestion in China impacted revenue and created uncertainty.
- Shareholder Returns: Significant share repurchases and dividends bolstered investor confidence and stock value.
Our Current Assesment Of AMAT Stock
Opinion: We currently find AMAT stock fairly priced. Why so? Have a look at the full story. Read Buy or Sell AMAT Stock to see what drives our current opinion.
Risk: A good way to gauge risk with AMAT is to check how deep its drops have been in past market meltdowns. It fell about 76% during the Dot-Com Bubble, nearly 64% in the Global Financial Crisis, and around 55% during the Inflation Shock. Even less severe sell-offs like the 2018 Correction and the Covid Pandemic triggered declines above 40%. Solid fundamentals matter, but history shows AMAT can still take big hits when markets turn sour.
AMAT stock may have seen strong gains recently, but investing in a single stock without detailed, thorough analysis can be risky. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.